Real 2026 valuation multiples, why your recurring monitoring revenue is the whole ballgame, and how to get a free, confidential valuation.
The industry rule of thumb for alarm and security monitoring companies is 3x to 5x annual EBITDA. Unlike most Main Street businesses, alarm company buyers are really buying a recurring revenue stream — your monthly monitoring fees — so the size and durability of that base matters more than almost anything else.
Buyers, including large national consolidators, will often pay a specific per-account multiple for your Recurring Monthly Revenue (RMR) on top of a base business valuation — the bigger and stickier that RMR base, the stronger your position at the table.
These figures are industry rules of thumb, not appraisals — your actual valuation could land higher or lower than shown above depending on your specific RMR base, churn, and contracts.
Losing accounts quickly forces buyers to discount your multiple to account for replacement costs.
Legacy monitoring equipment becomes an immediate capital expense buyers subtract from your asking price.
Contracts that don't clearly assign to a new owner create real risk that buyers price into a lower offer.
If new sales depend entirely on the owner's relationships, buyers discount for growth and transition risk.
The industry rule of thumb is 3x to 5x annual EBITDA, driven heavily by the size and quality of your recurring monitoring revenue base.
Recurring Monthly Revenue is your monthly monitoring fee income. Buyers pay a premium for it because it behaves like subscription revenue, and a large, low-churn RMR base is the biggest value driver in this industry.
Yes, significantly. Low attrition signals a sticky, durable revenue base, while high churn forces buyers to discount the multiple.
High customer churn, outdated technology, non-transferable contracts, and heavy owner dependence for sales are the most common reasons an alarm company sells below its potential.
I'll review your RMR base, churn, and contracts to give you a real valuation range — no cost, no obligation.