La Capitale seized its first opportunity outside Quebec in late summer 2006 by acquiring Penncorp, the Canadian subsidiary of the Universal American Financial Corporation. This transaction was carried out by a joint venture 30% owned by the French mutual GMF Assurances and 70% by La Capitale.
At the time of the acquisition, Penncorp offered individual hospitalization and disability insurance products throughout Canada via a network of about 200 captive insurance agents and 13 offices across the country.
Located in Mississauga, Ontario, the Penncorp offices began sporting the La Capitale logo this summer. The nearly 100 employees of the head office feel a strong connection to the parent corporation in Quebec, he says. Half of the staff has signed up for French courses, Robert St. Denis, president and chief executive officer of La Capitale points out.
Penncorp had been stagnating and even shrinking in recent years, Mr. St. Denis notes. The American owners had slowed investment in the company’s Canadian operations to a trickle, which sapped employee morale, he says.
"We knew that we could turn the situation around by investing more," Mr. St. Denis explains. "In fact, the sales curve of Penncorp rebounded four months after the acquisition, and we have boosted the value of the company by 25% during this period."