First Chicago NBD Corp. said Tuesday it had agreed to buy Roney & Co., a Detroit-based investment banking firm and brokerage, for $95 million.
The addition of Roney's 28 offices in Michigan, Indiana, and Ohio would significantly expand First Chicago's retail brokerage business, First Chicago said.
Combined with the existing First Chicago NBD Investment Services Inc., the banking company would have 300,000 retail brokerage customers and 500 salespeople. The transaction is expected to be completed in the first quarter.
First Chicago earlier this year was granted permission for expanded investment banking powers, but a spokesman said the company was primarily interested in Roney's retail brokerage distribution.
"The focus is on cross-selling," said analyst Joseph Duwan with Keefe, Bruyette & Woods Inc. "More and more banks are realizing the brokerage network can be a pretty valuable distribution tool."
Mr. Duwan described pricing of the deal as "reasonable," but it could not be learned how much revenue Roney has been generating. A First Chicago spokesman said his company expected the acquisition would add to revenues "relatively quickly."
Roney had been rumored to be for sale since early this year.
Robert J. Michelotti, the firm's president and chief executive officer, said a number of institutions expressed interest in buying Roney, but the company talked seriously to only a few. At least two other banks, Comerica Inc. and First of America Bank Corp., both of Michigan, were believed to be interested in the company.