Zions First National Bank has acquired a 24.5 percent interest in Roth Capital Partners LLC, a California investment capital firm that provides funding for a variety of technology businesses.
The bank said it will pay $16.5 million for the stake in Newport Beach-based Roth Capital and has an option to add to its holdings in the future.
The acquisition will make Zions the second largest shareholder of Roth, but the bank will not have a seat on its board of directors. Byron Roth, chairman and chief executive officer, will continue as the majority stockholder in the firm.
"We find a strong partner with Roth Capital because it is an organization that services a client base that is virtually identical to our own and, together, we can offer a variety of complementary financial services," said Harris Simmons, president and chief executive officer of Zions Bancorp, holding company for Zions Bank.
"This relationship allows Zions' customers to have access to the full array
of financial services offered by an investment bank while giving Roth Capital clients ready access to the vast expertise and resources that we offer as a major commercial bank."
Roth noted that the trend in recent years has been for banks such as Zions to acquire investment banks like Roth Capital, but he said Zions' minority interest in his firm "helps Roth Capital maintain its entrepreneurial edge and keeps our cultures separate."
In addition to the capital infusion from Zions, other members of Roth's management team, including its newly named president, Patrick J. Allen, are putting up another $2.5 million in capital for the company to use for investing. Allen came to Roth this month from his post as managing director and head of equities for Chase H&Q.
Roth keeps several offices outside his Southern California headquarters but all in Western states. The company specializes in providing emerging growth companies with access to the capital markets and to financial advisory services at all stages, from startup to expansion.
It also has a stake in RedChip.com, an Internet-based firm that provides investment and research information for small-cap companies.