Byron Roth, chief executive of Roth Capital Partners, Orange County’s largest investment banking firm, has more to look forward to this month than just his firm’s highly anticipated annual investor conference.
Roth last week unveiled a new blank check company, Roth CH Acquisition I Co., that intends to raise $75 million in an initial public offering.
The offering is a venture featuring execs from both Roth Capital and Craig-Hallum Capital Group LLC, a Minneapolis-based small-cap investment firm.
Those two investment firms are also acting as the underwriters for the IPO.
Byron Roth serves as CEO of the new Roth CH entity, while his brother Gordon Roth is chief financial officer, a title he also has at Roth Capital.
The blank check firm said it plans to use proceeds from the offering—whose combination of stock and warrants would value it at about $96 million—to buy a company in the healthcare, wellness, consumer or technology sectors.
Roth CH Acquisition said it does not yet have any specific acquisition targets under consideration.
SPAC Structure
The new firm would have about two years after going public to complete an acquisition. If a deal isn’t approved by its shareholders and completed in that time frame, the entity—commonly known as a special purpose acquisition company, or SPAC—would liquidate and return its funds to the shareholders.
A similar type of vehicle was used last year to take Irvine’s Allied Esports Entertainment Inc. (Nasdaq: AESE) public; the provider of esports offerings and owner of the World Poker Tour has seen its shares fall some 70% since that deal was completed with SPAC Black Ridge Acquisition Corp. of Minneapolis.
Shares of the Roth CH venture would trade on the Nasdaq under the “ROCHU” ticker symbol.
March Conference
Roth Capital’s existing work is dedicated to the small-cap public market; it has raised over $50 billion for small cap companies since 1992 and has completed some 335 advisory assignments. The Newport Beach firm currently provides research coverage on nearly 370 public companies.
It should have no trouble finding suitable acquisition candidates; the annual Roth Conference counts more than 500 participating smaller-sized public and private companies, with an emphasis on those in the tech and healthcare industries. Almost 5,000 people typically attend the event.
The 32nd Roth Conference is scheduled for March 15-17 at Ritz-Carlton, Laguna Niguel.
There’s been no mention of a potential postponement of the event due to concerns around the coronavirus, unlike other events in Anaheim and Huntington Beach (see story, page 1).
QB Ties
The offering adds another line to Byron Roth’s résumé, regulatory filings pertaining to the IPO note.
He’s also a co-founder and general partner of three private investment firms: Rx3 LLC, “a $50 million influencer fund focused on consumer brands”; Rivi Capital LLC, a $35 million fund “concentrated in the mining sector”; and Aceras Life Sciences LLC, “an in-house incubator focused on funding the development of novel medical innovations,” filings note.
One of the other R’s in Newport Beach’s Rx3 is Green Bay Packers quarterback Aaron Rodgers.
The Roth CH entity, headquartered in the same office as Roth Capital, plans to raise $75 million in the IPO by offering 7.5 million units at a price of $10.
Each unit consists of one share of common stock and one half of a redeemable warrant, exercisable at $11.50.
It’s the second OC-based IPO plan to be disclosed in as many weeks; Irvine device maker Inari Medical Inc. late last month filed paperwork for a $100 million IPO, a plan detailed in the March 2 print edition of the Business Journal.
