Security

Ex-Tyco CEO Dennis Kozlowski Talks Behind Bars

Former head of ADT’s corporate ownership discusses his security industry legacy, major acquisitions and life in prison.


Jason Knott · June 29, 2011

Everyone in the security industry is familiar with the scandal surrounding former Tyco CEO Dennis Kozlowski, who is still serving a prison sentence of eight to 20 years after he and his co-defendants were convicted of excessive bonuses totaling $430 million, tax evasion and stealing more than $100 million from ADT’s parent company.

The headlines focused on his lavish misappropriations: the $2 million birthday/toga party in Sardinia he threw for his wife, the $11 million in artwork for his Manhattan apartment, a $15,000 doggy umbrella stand, and of course, the infamous $6,000 shower curtain.

But putting aside the events that led to his conviction, Kozlowski leaves an unassailable legacy in the security industry. Here is a man who guided ADT from 700,000 accounts to more than 7 million, fostered an extremely successful dealer program and left a company that is so dominant that many believe its presence and market share alone are single-handedly keeping big phone, cable and utility companies out of the alarm business.

Kozlowski filed suit in a bid to get a temporary reprieve from prison, saying he’s been wrongfully denied work release three times in the past year and that he has a job offer waiting for him.

In an effort to document Kozlowski’s contributions for the National Alarm Museum, a delegation of security industry leaders led by Ralph Sevinor of Wayne Alarm Systems in Lynn, Mass., visited him last year at Mid State Correctional Facility in upstate New York. Sevinor and his group spent four hours with Kozlowski talking about his business philosophies, the future of the industry, wins and losses, and life in prison.

Here are some highlights of that conversation with Prisoner #05A4820.

ADT Buyout Details
On buying ADT: ADT was on our radar from the late 1980s. We knew the company. Grinnell and ADT were both once part of the same company. We had hundreds of thousands of fire sprinkler customers that we could possibly move into the ADT central stations and offer our commercial customers security monitoring. That was our plan at the time, and we were probably going to get out of the residential security business. That’s how we justified the acquisition, which wasn’t the way it went at all when we got to understand the business.

Related: Tyco in Talks to Buy Visonic

We had been trying to connect for about a year. Then, Western Resources, a utility company in Kansas, tried a hostile takeover of ADT. I don’t think [former ADT CEO Michael] Ashcroft was preparing ADT for sale, but the Western Resources bid accelerated his timetable. Ashcroft was looking for a white knight.

ADT’s market cap at the time was $6.1 billion. We paid close to $7 billion in Tyco stock for the company.

There was a problem though with the deal: ADT was based in Bermuda. Tyco could not bring ADT back to the America without paying taxes that were going to cost more than the deal. So we did a reverse merger, in which ADT would acquire Tyco. And the management of Tyco would become the management of ADT - a tricky proposition.


  About the Author

Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at jason.knott@emeraldexpo.com

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  Article Topics


Security · News · ADT · CCTV · Dennis Kozlowski · Tyco · All Topics
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