How much is an alarm and security business worth?

Short answer: alarm businesses are priced two ways at once — the operating company on SDE, and the monitored account base on its recurring monthly revenue (RMR). There is no verified trade-specific realized SDE multiple in the data we use, so the operating math below runs on labeled category data, while the RMR method is explained on its own terms. Which lens dominates depends on how much of your revenue actually recurs. See the Alarm & Security page, then run your numbers in the valuation calculator.

The number

First, what we will not do: invent a realized multiple. Alarm and security has no verified trade-specific realized SDE multiple in BizBuySell's trailing-five-year closed-sales data (Q3 2021 through Q2 2026) quoted for this trade alone on this page's source list. The category frame is the IBBA Market Pulse size ladder (Q2 2026) — and size moves the multiple more than almost anything: 2.0× SDE for prices under $500K, 2.8× at $500K–$1M, 3.1× at $1M–$2M, 4.8× EBITDA at $2–5M, and 5.8× EBITDA at $5–50M. The labeled public proxy: Business & Consumer Services at 14.26× EBITDA (Damodaran Online, January 2026) — an opportunity-cost anchor for buyers, not a price for a local alarm company.

Worked example. Assume, as an assumption to replace with your books: revenue of $800,000 and an SDE margin of 25%. Line by line: $800,000 × 25% = $200,000 of SDE. On the first ladder rung: $200,000 × 2.0 = $400,000 for the operating business as a starting estimate. Then a buyer reconciles it against the account base — next section — because in this trade the contracts can be worth more than the trucks, the office, and the name combined.

How buyers actually value an alarm and security business

The unit of value is net RMR under contract: the monthly monitoring and service revenue from subscribers with signed agreements, after stripping out accounts a buyer will not pay for — accounts 90-plus days in arrears, unfinished installs, and accounts on terms that cannot transfer. Buyers apply a multiple to that net RMR, and the contract decides the multiple. Signed standard-form agreements, automatic renewal clauses, assignability to a buyer, and time remaining all raise it. Month-to-month handshakes and contracts so old they predate your current panel line lower it — sometimes to zero.

They also sort the RMR by type, because it is not all equal. Monitoring RMR is the highest-margin, stickiest layer. Service-contract RMR carries labor cost and gets a harder look. Lease RMR depends on who owns the equipment and what it is worth at term end. Attrition is the other number that matters: the percentage of accounts you lose each year. A buyer paying for years of expected monitoring revenue does the subtraction honestly even if you do not. Install revenue — cameras, access control, new systems — is priced as project work: real, but it must be re-won, so it supports the SDE lens rather than the RMR lens.

What raises the price — and what kills it

Raises it:

• Signed, assignable contracts with auto-renewal on most of the base — RMR a buyer can actually buy.
• Low, documented attrition, reported monthly from the billing system, not estimated at the kitchen table.
• A commercial mix — access control, video, fire monitoring — alongside residential, so one housing downturn cannot take the base.
• Clean account data: contract, panel, central station, payment method, and arrears status per subscriber.

Kills it:

• A base carried on expired or unsigned agreements. Revenue without a contract is a hope, priced as one.
• Hidden attrition — counting dead accounts as live RMR until the buyer's audit finds them.
• Arrears stacked past 90 days and accounts that need truck rolls to work at all.
• Install revenue doing all the growing while the monitored base quietly shrinks.

Move your number

Margin and collections: failed cards and lapsed payment methods are silent attrition — every dead card is an account cancelling itself. The Finix payments team works on card-on-file hygiene, automatic card updates, and dunning that recovers subscribers before they become churn statistics, which protects both SDE and RMR. Recurring revenue: convert install customers into monitored, serviced accounts at the moment of install, and run save-the-account follow-up when someone calls to cancel — operations the ClaroPro team builds with AI answering and follow-up, so no cancellation request sits in a voicemail box. Systems: an account base a buyer can audit — contracts, attrition, and RMR by type out of one system — is a build for a Nova engineering team. Then price both lenses, starting here: the calculator, prefilled for alarm and security.

This is an educational framework with the math shown, not an appraisal and not a statement of fair market value. A real price is set by a real buyer on a specific day, and in this trade it will be set account by account. The caveats protect you, the owner: they keep you from overpaying for RMR that is not under contract, from underselling a base that is, and from signing a deal whose exclusions quietly hand your best accounts back. If a number cannot be shown, do not let it be used against you — that is what being on the owner's side means.