SSI Industry Hall of Fame Class of 2018 Inductee: Dennis Stern

Stern has spent more than 40 years as an industry legal expert and facilitated in excess of 300 M&A transactions that include some of security’s most substantial deals.

Founded in 2004 to represent the highest commendation for going above and beyond in professionalism, conduct and achievement, the SSI Industry Hall of Fame now numbers nearly 100 members.

SSI is proud to welcome Dennis Stern, principal Dennis M. Stern Corp. (formerly with Buchanan Ingersoll, ADT, National Guardian, Wells Fargo Alarm and others), to the class of 2018.

Why He’s on the List

  • More than 40 years as an industry legal expert who has facilitated in excess of 300 M&A transactions that include some of security’s most substantial deals
  • Entered security alarm business in 1974 by joining the Wells Fargo Alarm Services Division of Baker Industries to develop an in-house legal department; involved in rollup of alarm companies resulting in growth from about $20 million in revenues to $100 million+
  • Subsequently joined startup National Guardian, where he served as general counsel and in executive roles as the firm became the third largest U.S. security company ($215 million+ in revenues)
  • Then completed 12 acquisitions at Holmes Protection before that company was bought by ADT Security, where he remained and created the ADT acquisition group that rolled up 65+ companies during his two-year stint
  • Next joined SSI Industry Hall of Famer Jim Covert at Cambridge Security where he was involved in several acquisitions, most significantly SecurityLink from Ameritech
  • SecurityLink was then dealt to ADT/Tyco in one of the industry’s largest and most successful M&A transactions, in excess of $1 billion
  • Three years later, he again joined Jim Covert to buy Honeywell’s security alarm business, which was rebranded as HSM and subsequently sold to Stanley

Keys to Success

“In addition to hard work and attention to detail, the most important ingredient to my success has been dealing with people honestly on both sides of the transaction; also, when the companies were confronted with ‘problem’ issues, laying out the issues and the solutions, irrespective if my senior management was happy to hear my opinion. People I credit my success to include Frank Cole, president of the Wells Fargo Division and National Guardian.

More importantly was James Covert, with whom I did the Cambridge Protection rollup and sale to ADT, and the HSM purchase of the Honeywell Alarm Division, among other smaller acquisitions.My top challenge along the way was when the Cambridge/ADT transaction in excess of $1 billion hit the wall and the parties stopped talking. Working with a former colleague at ADT, I was able to open up communications that got the transaction back on track.”

Becoming an M&A Mensch

“Mergers and acquisitions started out as a smaller part of my in-house practice, but grew consistently over the years either as in-house counsel or when, due to noncompetes, I went to work for law firms that had an alarm security practice. Now it is basically 90% plus of my practice. The most challenging aspects have been as in-house counsel walking that line to make sure the customer contracts properly balanced the needs of the sales department and protected the company on the risk exposure side. Significant time was spent on more substantial contracts to get a revision to major provisions that would work for both parties. We also developed a bid cover letter taking exception to certain liability provisions that are in all of those documents.”

Guidance Feels Good

“I find it fulfilling to share my knowledge of the security business with people as a mentor or in educational presentations in a way that hopefully helps people in operating and/or getting their business ready for sale. One client with a very nice small company he was growing felt it wasn’t appropriate to ask customers to execute a contract with a limitation of liability clause. I pointed out that all his work would be in vain because when he tried to sell the company he would find few if any buyers, or get a much reduced price, for not having ‘standard’ industry contracts. We reworked his purchase order form to have the necessary protective provisions but also satisfy his customer relations by keeping it somewhat shorter and focused on essential terms and conditions.”

Closing Customer Is Always Right

“At National Guardian, we acquired a very substantial independently owned security alarm company on the West Coast. The negotiations were long and contentious, but we finally thought we had gotten agreement from all parties to the terms of the proposed transaction. On the night before closing, the owner came up with one final demand: reimbursement for first-class plane tickets for the two owners and their wives and their accountant of many years, who had been very helpful to them in the negotiations, and his wife. After a brief pause to reflect on this unusual request, we agreed and closed the next day. I think they had a great trip to Paris, but we never even got a postcard! The bottom line is you never can tell what will finally seal a deal.”

The Stern File

♦Born 1941 in Amsterdam

♦Middle child to two brothers; father was an international minerals and metals trader, mother was homemaker

♦Married to wife Kathianne, with three children and three stepchildren, and nine grandchildren

♦Earned undergraduate degree from City College of New York and graduate degree from New York University Law School

♦Says if career had taken a different path might have become a commercial airline pilot

♦Served as president of Holocaust Child Survivors of Connecticut

♦Says top wish for industry change is more unity/mergers among associations for bigger lobbying impact at national and state levels

♦Other interests include skiing, kayaking, biking and tennis

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