Security & Alarm Company Valuation Multiples 2026: What is Your Business Worth?
Security and alarm companies occupy a privileged position in the M&A market: they are one of the few industries where recurring revenue is the product itself. Monitoring contracts generate predictable monthly revenue that buyers can underwrite with confidence, which is why the industry has its own valuation currency: recurring monthly revenue (RMR).
Consolidation is active in 2026. National platforms, regional super-regionals, and private equity firms are all acquiring alarm, monitoring, and integrated security companies. If you own one, understanding how buyers will value it is the first step toward a premium exit.
Quick answer: Most security and alarm companies sell for 25x–45x RMR (recurring monthly revenue) or 4x–8x EBITDA in 2026. Monitoring-heavy companies with low attrition trade at the top of the RMR range; integration-heavy businesses with project revenue are valued closer to 4x–6x EBITDA. Account attrition below 8% annually and contract quality are the biggest drivers of a premium multiple.
How Security & Alarm Companies Are Valued
The industry uses two frameworks, often side by side:
RMR multiples for monitoring-centric businesses. Buyers pay a multiple of contracted recurring monthly revenue, which is the cleanest measure of the asset they are actually acquiring.
EBITDA multiples for companies with significant installation, integration, or service revenue alongside monitoring.
Many transactions blend the two: an RMR multiple for the monitoring book plus an EBITDA-based value for the integration business.
2026 Security & Alarm Valuation Multiples
| Company Profile | Typical Multiple | Valuation Basis |
|---|---|---|
| Residential alarm accounts (standard contracts) | 25x–35x RMR | RMR |
| Commercial monitoring accounts (multi-year contracts) | 30x–45x RMR | RMR |
| Integration-heavy security company ($2M–$10M revenue) | 4x–6x EBITDA | EBITDA |
| Hybrid monitoring + integration with scale | 5x–7x EBITDA | EBITDA (or blended) |
| Platform-ready (management, density, low attrition) | 6x–8x EBITDA / top of RMR range | Either |
What Drives Premium Multiples
Account Attrition
Attrition is to alarm companies what churn is to SaaS: the number buyers scrutinize hardest. Gross annual attrition below 8% is strong; above 12% materially compresses the RMR multiple. Buyers will analyze attrition by vintage, by account type, and net of moves and takeovers.
Contract Quality
Written, assignable monitoring agreements with auto-renewal terms
Remaining term: A book of accounts with 3+ years average remaining term is worth more
Rate integrity: Accounts priced at or near market rates, with escalators
Third-party vs. owned monitoring: Clean central-station contracts that transfer smoothly
Revenue Mix
Monitoring RMR is the premium asset. Installation and integration revenue is valued, but at standard project-business multiples. Companies that convert installations into monitoring contracts systematically, achieving high "attach rates," demonstrate the growth engine buyers want.
Account Density
Geographic density lowers service costs and increases the value of the book to a consolidator already operating in your market. A dense metro book often attracts strategic premiums from buyers seeking route efficiency.
Owner Dependence and Team
As in every service business, a company that runs without the owner (with technicians, sales reps, and an operations lead in place) commands a premium over one where the owner sells, installs, and manages everything.
Who Is Buying Security & Alarm Companies in 2026
National consolidators and super-regionals acquire account books for density and scale and are often the highest payers for pure RMR.
Private equity platforms are building integrated security services companies combining monitoring, access control, video, and fire/life safety.
Fire & life safety consolidators increasingly buy alarm companies to cross-sell inspection and monitoring services.
Independent buyers target owner-operated companies in the $1M–$5M revenue range, often valuing the recurring revenue for SBA financing.
Preparing Your Security Company for Sale
Get your contracts in order. Secure written, assignable agreements for every monitored account; missing paperwork directly reduces the accounts a buyer will pay for.
Measure and manage attrition. Track it monthly, understand the causes, and demonstrate a trend below industry averages.
Raise attach rates. Convert installation customers to monitoring contracts before going to market.
Document your RMR schedule. A clean account-level schedule of RMR, contract terms, and vintages is the core diligence document.
Reduce owner dependence. Build a service and sales layer that operates without you.
Clean up financials. Separate monitoring, service, and installation revenue clearly; blended P&Ls hide the value of your recurring book.
If you own a security, alarm, or monitoring company and want to understand what buyers would pay for your RMR book, schedule a confidential conversation with our team. We understand the dynamics of security industry M&A and can help you position for a premium outcome.
FAQs
What is RMR and why do buyers care so much?
RMR is recurring monthly revenue: the contracted monitoring fees your accounts pay every month. It is the industry's valuation currency because it is predictable, contractual, and transferable. A company with $50K of quality RMR at a 35x multiple carries $1.75M of value in the monitoring book alone.
What attrition rate do buyers expect?
Gross annual attrition below 8% is considered strong; 8–12% is average; above 12% will compress your multiple. Buyers analyze attrition net of moves, takeovers, and non-pays, and they will verify it against your account records.
Is installation revenue worthless to buyers?
No, but it is valued like project revenue (lower multiples), not like RMR. Its real value is as an engine for creating new monitoring accounts. High attach rates make installation revenue strategically valuable.
Can I sell just my account book without the company?
Yes. Account book sales (asset sales of monitoring contracts) are common in the industry and are priced purely on RMR multiples. Selling the whole company including your team and integration business is a different transaction, often at a better total outcome.
How does my central station relationship affect the sale?
Buyers prefer accounts monitored through reputable third-party central stations with clean, transferable dealer agreements. Proprietary monitoring arrangements or restrictive dealer contracts can complicate transfers. Review your agreements before going to market.
Recommended Reading
How to Sell a Fire Protection Company: A practical guide to preparing, valuing, and selling a fire protection business.
SDE vs EBITDA: What Buyers Need to Know Before Valuing a Business: Which earnings metric applies to your company.
Should You Sell Your Business to Private Equity?: What PE consolidation means for security company owners.
How to Find the Right M&A Advisor: Choosing representation that understands RMR-based deals.
Key Takeaways
Security and alarm companies are valued on RMR multiples (25x–45x) for monitoring books and EBITDA multiples (4x–8x) for integration-heavy businesses; many deals blend both.
Account attrition is the single most scrutinized metric; below 8% annually supports premium pricing.
Written, assignable monitoring contracts with healthy remaining terms are the foundation of value. Paperwork gaps directly reduce your price.
Geographic density attracts strategic premiums from consolidators already operating in your market.
Converting installation customers into monitoring contracts before a sale is the highest-ROI preparation move available to owners.