Sterne Agee agrees to buy another B-D

Plans to acquire Richmond-based Anderson & Strudwick; bid to buy SWS rejected in March

Oct 5, 2011 @ 1:49 pm

By Bruce Kelly

Sterne Agee Group Inc. continues to try to carve out a bigger piece of the independent broker-dealer marketplace, agreeing to buy a small broker-dealer, Anderson & Strudwick Inc.

The acquisition affects 100 representatives with Anderson & Strudwick, which is based in Richmond, Va. The firm's sales force is split evenly between reps who are employees and those who are independent contractors.

“I really view the deal as a fine compliment by Sterne Agee, that they thought enough of what we had built to purchase” the firm, said Todd Newton, the chief executive of Anderson & Strudwick until last year. “It's a real positive. The much stronger balance sheet will benefit the financial advisers,” said Mr. Newton, who is now an independent consultant.

Sterne Agee said this afternoon it had signed a letter of intent to acquire Anderson & Strudwick. Terms of the deal were not disclosed.

Most of Sterne Agee's business is institutional, and it is a large clearing firm. It currently has about 400 registered reps, evenly divided between employees and independent contractors. (For a full profile of Sterne Agee's rep count, assets and financials, view the firms' profile in the InvestmentNews Broker-Dealer Database.)

Jim Holbrook, Sterne Agee's CEO, did not return phone calls seeking comment. Damon Joyner, CEO at Anderson & Strudwick, will become a senior managing director at Sterne Agee. He, too, did not return a phone call seeking comment.

Based in Birmingham, Ala., Sterne Agee has been circling broker-dealers for some months. In March, it made an unsolicited takeover bid for SWS Group Inc., the holding company for a regional clearing and brokerage firm. Sterne Agee offered to buy SWS of Dallas for $203 million in cash, or $6.25 per share. SWS' board quickly rejected that takeover proposal.

With this acquisition, Sterne Agee will expand its wealth management business in the eastern United States, as well as Knoxville, Tenn. and Chicago, according to a statement. Anderson & Strudwick has eighteen offices in those areas.

The agreement is the latest in a string of acquisitions that have taken place in the wealth management industry over the last several months, which have included firms such as H.D. Vest Financial Services and Securities America. For a more complete look at recent M&A activity, visit the InvestmentNews Deal Tracker database.

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