First Carolina Investors Inc., an investment fund run by Buffalo investor Brent D. Baird, has acquired a 19.45 percent stake in Barrister Information Systems Corp., the struggling local computer software and services firm.
First Carolina, which disclosed its investment in a filing it made with the Securities and Exchange Commission on Friday, paid 62 percent less than market value when it acquired nearly 1.6 million shares of Barrister stock from Tarragon Investment Holdings Ltd., a British investment company, in a private transaction on March 20.
First Carolina paid 50 cents per share, or a total of $799,050, for its stake on a day when Barrister's stock closed at $1.31 per share. It is not uncommon for large investors to receive a discount from the market value when they acquire a major stake in a company in a private transaction.
Tarragon also sold another 402,000 shares of Barrister stock to company executives and other investors familiar with the firm, said Mark C. Donadio, Barrister's secretary and general counsel.
Tarragon, which had acquired its Barrister stake from another British investment firm, Brebar Investments Ltd., no longer owns any shares of the Buffalo company's stock, Donadio said.
The investment increases Baird's already wide-ranging influence among Buffalo's publicly-traded companies. Baird, through First Carolina and other affiliates, now owns major stakes in six Buffalo-based companies.
Baird said in the filing that he had been approached by Henry P. Semmelhack, Barrister's president, about serving on the company's board of directors. Baird said he is willing to join the board if he is elected by shareholders. Donadio said Baird is expected to join the board at its next meeting in April.
"Hank knows Brent Baird and likes him very much," Donadio said.
Baird, who has taken an active role in changing management at two of his other major local investments, Merchants Group Inc. and Exolon-ESK Co., said First Carolina has no plans to try to change Barrister's management or its business.
In some instances, Baird has remained in the background, although he did play a leading role in a 1996 management shake-up at Merchants Group Inc. and supported a shareholder revolt that led to the appointment of a new chairman at Exolon-ESK Co. in 1992.
Because of the Merchants shake-up, Baird now serves as the president of the Buffalo-based insurance company, in which he owns a 9.9 percent stake.
Baird also owns a 17.2 percent stake in Exolon's common stock and is a member of the City of Tonawanda abrasives manufacturer's board of directors. Baird was aligned with a dissident shareholder group that mounted a bitter fight with Exolon's German co-owners for control of the company in the early 1990s and ultimately won the appointment of Baird ally Theodore E. Dann Jr. as its chairman.
Baird also is a director of First Empire State Corp., the Buffalo-based banking firm that owns M&T Bank. Baird's group owns a 5.5 percent stake in First Empire. Baird and his affiliates also own a 16.9 percent stake in Taylor Devices Inc., a North Tonawanda shock absorber manufacturer and a 23.5 percent stake in Ecology & Environment Inc., a Lancaster-based environmental services firm.