
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, March 1, 1995                   TAG: 9503010070
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: MAG POFF STAFF WRITER
DATELINE:                                 LENGTH: Medium

BROKERAGE FIRMS' MERGER CALLED OFF

Ferguson, Andrews & Associates of Roanoke said Tuesday it has terminated its agreement to purchase Anderson & Strudwick Inc. of Richmond. The merger would have created one of the state's largest financial services firms.

T. Michael Smith, president of Ferguson, Andrews, said it could not agree on one major issue involving representations and warranties by Anderson & Strudwick.

James Kern, vice president of Ferguson, Andrews, explained that sellers of a business are asked to make representations and warranties that there are no outstanding problems. He said that is especially important for securities brokerages, particularly those involved in underwriting deals such as launching new stock issues.

The two companies, Kern said, were unable to work out language satisfactory to both Ferguson, Andrews and the stockholders of Anderson & Strudwick. Kern said it was a question of limiting the purchaser's exposure to liability from past underwriting deals.

"We had agreed on basic financial terms, organizational structure and how we would position the firm in the future," Smith said. "But this one issue prevented us from completing the acquisition."

Tom Robertson, president of Anderson & Strudwick, said that although the company has no pending problems, the proposed agreement would have required the officers of Anderson & Strudwick to be responsible if problems arose from past actions.

``I would not be able to get a mortgage or borrow any money for seven years with that type of agreement,'' Robertson said. ``We just weren't willing to agree to that.''

Ferguson, Andrews said it will continue toward establishing a major statewide presence, Smith said. The company, which has 51 employees and 5,000 clients, would have surged to 125 employees and 15,000 clients if the sale had been completed. Ferguson, Andrews & Associates has offices in Roanoke, Richmond, Charlottesville, Lynchburg and Bristol.

Smith said. "We intend to acquire other firms in Virginia and outside and build this company into a regional player." He identified North Carolina and West Virginia as likely areas for acquisitions.

The firm's chairman, J. Gray Ferguson, will continue his active role in the firm, Smith said. Ferguson, a Charlottesville investor, formerly was president of American Safety Razor Co., a Verona-based maker of private-label shaving blades and other products.

The Associated Press contributed to this story.

by CNB