The Canadian Press

Industrial Alliance Insurance and Financial Services Inc. (TSX:IAG) said Wednesday it has signed a deal to raise $200 million in an offering of common and preferred shares.

The company said the cash raised will be used to increase its financial flexibility, improve its balance sheet and finance potential acquisitions.

Industrial Alliance said it has signed an agreement with a syndicate of underwriters co-led by BMO Capital Markets and RBC Capital Markets to issue 2.95 million common shares at $34 each in a bought deal.

It will also issue four million non-cumulative class A preferred shares at a price of $25 each. The preferred shares will yield 5.9% per year, payable quarterly. They will not be redeemable before March 31, 2015.

The company has also granted the underwriters an option to buy up to an additional 15% of the common shares at the offering price to cover over-allotments.

Industrial Alliance administers over $58 billion in assets.

Shares in the company, which announced the financing after the closer of markets, were up 15¢ at $34.49 on the Toronto Stock Exchange.