The 2026 Security Systems Business Valuation & EBITDA Multiples Guide

Joe Lewin · Founder, DealFlowAgent · LinkedIn Published April 2026 · Updated July 2026

Electronic security is one of the most actively consolidated trades in private company M&A, and the record is public. Capstone Partners counted 242 security sector transactions in 2025, up 24.1% year on year, with disclosed deals averaging 11.8x EV/EBITDA over five years. In the UK, fire and security took 23% of the 184 facilities-services deals of 2025, with private equity involved in 82% of them. The buyers are named and funded: Inflexion took majority ownership of Ranger Fire and Security in June 2026 after the platform's 25 acquisitions took it past £75M of revenue; Intelligent Monitoring Group agreed to pay £180M for ADT's UK residential security business, a book of 160,000+ monitored customers running 93% recurring revenue; Mitie completed its £366M takeover of Marlowe at 11.2x adjusted EBITDA; and in the US, GTCR bought SimpliSafe at a reported ~$2.5bn, Pye-Barker completed 57 acquisitions in 2025 including a run of pure security businesses, and Ares closed an $850M continuation vehicle on Convergint, the largest independent commercial integrator.

What that competition pays. Prepared, professionally represented UK security businesses with £1M+ of defended EBITDA are transacting between roughly 5x and 8.5x, with monitored recurring revenue the single strongest lever at every size. Platform-grade groups above £3M of EBITDA reach 6.5x to 10x, and the largest prints sit higher. In the US, monitored account books carry their own published pricing convention of 36x to 46x recurring monthly revenue, covered honestly below, including why no UK equivalent is published. Below £1M of earnings the ranges step down band by band, and at every size the same EBITDA can be priced more than a full turn apart depending on recurring mix, attrition, certification and how the business is taken to market. Where the evidence is thin we say so, and figures that are our own house view are labelled DealFlowAgent data.

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Contents

1. Why two businesses with the same EBITDA sell for very different prices
2. What is a security business worth in 2026? The master table
3. How security businesses are actually valued
4. The size ladder, band by band
5. The 30 factors that set your multiple
6. Two worked examples, with the arithmetic shown
7. 2025-2026 transaction evidence: UK
8. 2025-2026 transaction evidence: US
9. 2026 demand drivers and the consolidation map
10. What kills the multiple
11. Deal structure by size: headline price versus cash at close
12. UK versus US: what actually differs
13. FAQ
14. Glossary
15. Methodology and sources

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Why two businesses with the same EBITDA sell for very different prices

Before any table of multiples, the point most owners miss. Take two security businesses, each showing £600K of EBITDA. The first earns it from project-led CCTV and access control installation: competitively tendered, re-won from zero every year, with maintenance sold ad hoc and no monitored estate to speak of. The second earns the same £600K from a monitored intruder and access book: NSI Gold certificated, police URNs on the connections, signalling already migrated to dual-path IP/4G, attrition measured in single digits, and a growing remote video monitoring line. The first will struggle to clear 4.5x. The second can defend 6.5x or better, and the platforms in the deal tables below will compete for it, because a monitored book is an annuity they can underwrite and a URN estate is a regulated asset they cannot build quickly. Same EBITDA, roughly £1.2M apart, and every pound of the difference is explained by things the owner can influence.

Throughout this page we keep three business models separate, because buyers price them on different evidence: monitored recurring revenue (RMR: the premium asset, with its own pricing conventions in the US), commercial integration and installation (priced on EBITDA, install-led books at a discount), and residential alarm books (a different buyer universe; labelled wherever residential data appears).

Five moves that raise the multiple before you sell. (1) Measure monitoring MRR, net attrition and revenue per connection monthly, because sophisticated buyers model the book separately and the absence of measurement is priced pessimistically; (2) finish the signalling migration: every connection still on analogue PSTN paths ahead of the January 2027 switch-off is a liability line in the buyer's model; (3) repaper large clients onto multi-year, indexed terms with assignment clauses that survive a sale; (4) build and evidence a second tier, including a manager who can hold the out-of-hours escalation and ARC relationship, so consideration stays as completion cash rather than earn-out; (5) have your EBITDA bridge defended to quality-of-earnings standard before the first buyer conversation. None of these requires new customers, and together they are routinely worth more than a year of trading growth.

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What is a security business worth in 2026? The master table

The ladder below is banded by defended EBITDA, the number buyers actually price (owner-operated businesses below roughly £250K of earnings are priced on SDE, covered beneath the table). Ranges are the DealFlowAgent tier view, calibrated against the published evidence cited in each band's subsection and the 2025-2026 transactions in the deal tables; no public source publishes UK security multiples by size band, so treat this as calibrated judgement anchored to named sources, not a price list. The lower bound describes an unprepared, install-weighted business sold without competition; the upper bound a prepared, professionally represented one with a strong monitored book. The factor framework is what moves a business between the two.

**Indicative revenue assumes the roughly 10-20% EBITDA margins we see in service-and-monitoring-led UK security businesses at each size, with monitored books at the top of that span (DealFlowAgent estimate from mandate work and filed accounts; no public source publishes UK security margins by size band; the only published margin datum is a US monitoring GROSS margin of 51.2%, a different measure). Multiple ranges: DealFlowAgent tier view calibrated against the sources cited per band and the linked deal tables.

Below £250K of earnings: owner-operated businesses price on SDE, typically 2.0x-3.0x depending on how much genuinely transfers without the owner. The published benchmarks at this size are US and residential-alarm-weighted (BizBuySell's sold security businesses average 2.73x SDE on a $750K median price) and should be read as floors: a certificated UK business with signed monitoring contracts carries scarcity those medians do not capture. The size ladder covers this band honestly, including the fastest routes up: contracted monitoring, a URN estate and a second certificated engineer.

See what these ranges mean for your business. Use the free calculator to get a live valuation range using the same 2026 sector evidence discussed on this page. 60 seconds. Calculate my valuation

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How security businesses are actually valued

Defended EBITDA, not claimed EBITDA

Every valuation conversation starts from the same equation: enterprise value equals adjusted EBITDA multiplied by a multiple, and both numbers are contested. Adjusted EBITDA starts from reported profit and adds back costs that will not continue under new ownership. Buyers do not take that schedule on trust: any serious acquirer, and every PE-backed one, runs a quality of earnings review whose job is to disprove your adjustments. The number that survives is what we call defended EBITDA, and it is the number that gets priced. An add-back survives if it is genuinely one-off, genuinely personal and documented; it fails if it recurs, if it is commercial rather than personal, or if the paperwork does not exist. And the damage of a failed add-back is never confined to the rejected line: a buyer who disproves one adjustment reprices the credibility of every adjustment, and typically takes the difference again in structure through heavier earn-outs and retentions. Mark your own homework before the buyer's accountants do; a conservatively drawn bridge that QoE confirms within a few per cent changes the multiple applied to every pound.

The multiple is a quality score

The multiple is not a market constant; it is the buyer's compressed judgement of how safely your earnings transfer. In this trade the judgement concentrates on four questions: how much of the revenue is monitored and contracted, what the attrition actually is, whether the certification and URN estate survives scrutiny, and how many credible bidders are at the table. Section five breaks that judgement into the 30 factors buyers score.

Below roughly £250K of earnings: SDE, not EBITDA

An owner-operated business where the owner surveys, installs, and takes the callout phone is priced on seller's discretionary earnings: profit plus the owner's full compensation, on the understanding the buyer works in the business. Published guidance puts the switch to EBITDA-basis pricing at around $1M of earnings; in practice buyers start deducting a manager's salary well below that. The benchmarks at this size (BizBuySell 2.73x SDE; IBBA's Q4 2025 sub-$500K median of 2.0x SDE) are US, generic and residential-weighted: floors, not security pricing. The hardest truth at the small end is that a business which is really a well-paid job with a van trades near the value of its contracts and kit; the encouraging corollary is that the first tranche of transferable earnings (signed monitoring contracts, a second certificated engineer) is the most valuable an operator ever builds.

Monitored books: the RMR conventions, and where they do and do not apply

Recurring monthly revenue is where security valuation genuinely differs from every other trade, and it deserves the honest version.

In the US, a published per-book convention exists. Alarm and monitoring books trade on a multiple of recurring monthly revenue. The canonical dataset is Barnes Associates: 2024-2025 transactions ranged from roughly 36x monthly RMR for sellers with under $50K of RMR to 46x for sellers above $500K (Michael Barnes, ESX, August 2025), with broker guidance clustering at 35x-45x. The economics behind the convention are creation cost and melt rate: the industry spends roughly $27.7 to create $1 of new RMR and runs monitoring gross margins around 51%, so a book bought at 40x that attrites slowly pays for itself; one that melts fast does not. On attrition, be careful with the numbers brokers quote: published industry actuals run around 10.5% (TMA survey average), with well-run large books like Brinks Home at 12.5%; the sub-5% figures circulated as "targets" are aspirational broker guidance. What is true is directional: buyers price down sharply above roughly 10-12% net attrition, and the top of the RMR range belongs to contracted, auto-renewing, sub-8% books.

In the UK, no x-RMR convention is published, and US figures repeated in UK conversations do not transfer as data. UK buyers price monitored books and maintenance contracts through the EBITDA multiple, awarding a premium for contracted, indexed, low-attrition recurring revenue, and frequently model the monitored book separately even when the offer expresses a blended multiple (DealFlowAgent data). The disclosed evidence points the same way: the largest UK security print of the window, ADT UK's residential book at £180M, was a 93%-recurring monitored estate, and the buyer's stated rationale was the annuity, not the installation arm. The practical takeaway is the same on both sides of the Atlantic: measure your MRR, attrition and revenue per connection, because the buyers who pay the top of the range are the ones who can underwrite the book line by line.

One public-market footnote worth understanding before anyone quotes listed comps at you: monitoring-heavy public companies trade at the CHEAPEST multiples in the sector (Houlihan Lokey's monitoring composite sits at 7.1x LTM EBITDA against 18.9x for large-cap systems integrators), while small private monitored books fetch the richest prices per pound of revenue. That is not a contradiction; it is debt loads and growth expectations priced into large caps versus scarcity pricing of transferable annuities in private deals. Neither number is your number: the ladder below is.

Are you a private equity firm, search fund or strategic buyer actively acquiring security businesses? Register your acquisition criteria to access off-market deal flow matched to your mandate. Evaluating a security business that falls outside your mandate? Our buy-side referral programme pays 15-20% of our success fee on referred deals.

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The size ladder, band by band

Size is the first thing every buyer screens on. Each band states the evidence behind its range, who transacts there, and what changes crossing in. The published base for this trade is US-heavy and, at the small end, residential-weighted; where a figure is US or residential we say so. The strongest UK anchors across the curve are Dealsuite's UK & Ireland adviser survey (all-sector SME multiples rising from 3.3x at £200K of EBITDA to 8.4x at £10M), Wilson Partners' UK fire and security transaction median of ~9x (blended, larger deals, 2024), and the Marlowe print at 11.2x.

Below £250K earnings: the owner-operator band

2.0x-3.0x SDE (DealFlowAgent view; US floors: BizBuySell 2.73x SDE average for sold security businesses, residential-weighted; IBBA 2.0x for sub-$500K deals, all-sector). Transferability decides everything here: a monitored book on contracts, a URN estate and a second certificated engineer move a sale from asset-value territory to a genuine multiple, because the annuity survives the owner's exit even when the relationships do not.

£250K-£500K defended EBITDA: professional buyers arrive

3.5x-5.0x, strong monitored books to 5.5x (DealFlowAgent tier view; US broker anchors: Breakwater's install-focused 4-5x and balanced-mix 5-6.5x). This is the first band where consolidators compete: several of Ranger's 25 platform acquisitions, and the Scottish succession deals in our UK table, sit here. What changes crossing in: accounts get read by professionals, the claimed-versus-defended EBITDA gap starts costing real money, and recurring mix becomes the dominant pricing question.

£500K-£1M defended EBITDA: the most competed band in UK security M&A

4.5x-6.0x, with 40%+ recurring books reaching 7x (DealFlowAgent tier view; Breakwater: 6-8x for 40%+ recurring, US; the Dealsuite UK curve passes 4x-5x through this band on all-sector terms, and certificated security books price above generic SMEs). This is the core bolt-on range for every funded UK platform: large enough to move a consolidator's numbers, small enough to integrate in a quarter. Because so many buyers compete here, process quality is worth as much as any operational lever: one consolidator negotiating alone versus four held in parallel is routinely a full turn.

£1M-£2M defended EBITDA: the institutional threshold

5.0x-7.0x (DealFlowAgent tier view; anchors: IBBA $2-5M deals at 4.1x as the all-sector US floor; the upper Dealsuite curve; UK blended fire and security transactions medianing ~9x at larger sizes above). Crossing £1M of defended EBITDA switches on institutional buyers' size screens and acquisition debt. Competition widens from trade-plus-consolidators to PE, and buyers begin pricing your second management tier, not just your contracts.

£2M-£3M defended EBITDA: management depth gets priced

5.5x-7.5x (DealFlowAgent tier view; anchors: IBBA $5-50M at 5.5x floor; Grant Thornton's 82% PE involvement in UK fire and security deals evidencing buyer depth). A buyer here is buying an organisation: an operations lead who holds the ARC relationship, a service manager who runs the engineer diary, a functioning FSM system. The same EBITDA with a second tier evidenced can carry two turns more than the founder-dependent version, the largest single spread on this ladder.

£3M-£5M defended EBITDA: platform grade

6.5x-8.5x (DealFlowAgent tier view; anchors: Wilson Partners UK median ~9x, IQR 6.9-9.25x, blended fire and security; Capstone's 11.8x five-year US disclosed average at larger sizes). This is platform grade: funds underwrite a business of this size as the foundation of a buy-and-build, the way Hyperion and then Inflexion underwrote Ranger, and pay a premium for the certification stack, ARC relationships and management team that bolt-ons will integrate into.

£5M-£10M defended EBITDA: print territory

7.5x-10.0x (DealFlowAgent tier view; anchors: Marlowe at 11.2x at larger scale; Houlihan Lokey's sector 13.6x TEV/NTM EBITDA on large transactions). Deals here make the trade press with numbers attached, buyers include listed groups and large PE, and monitored books at this scale begin to attract infrastructure-style capital, as Arcus buying WCCTV and GI Partners buying Netwatch both show.

£10M+ defended EBITDA: institutional demand, thin UK evidence

9x-12x+, structure-dependent, and we say plainly: UK evidence at this size is thin. Reference points are triangulation: Marlowe at 11.2x; Capstone's US disclosed-deal average of 11.8x; the £180M ADT UK book; and the listed comps, which mark sentiment rather than achievable private prices (APi Group ~19.7x, Alarm.com ~16.6x, while monitoring-heavy ADT trades under 7x; the spread is the business-model story explained above, not a menu). A UK group at this size transacts on process and structure, not on a table.

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The 30 factors that set your multiple

Two identical P&Ls can transact two turns apart, because buyers price the characteristics that determine whether the P&L repeats under their ownership. The framework below is how we structure that judgement on DealFlowAgent mandates (DealFlowAgent framework; the weights are our house view of buyer attention in this trade, not a published standard). Deal Process & Buyer Access carries the same weight as Financial deliberately: it is the only dimension a seller fully controls in the final twelve months, and it explains why identical businesses price differently depending on how they are sold.

Dimension 1: Financial (22%)

Dimension 2: Customer & Revenue (16%)

Dimension 3: Operations (14%)

Dimension 4: People & Organisation (13%)

Dimension 5: Strategic (13%)

Dimension 6: Deal Process & Buyer Access (22%)

The 27% figure. Across DealFlowAgent processes, running a competitive, multi-buyer sale rather than negotiating with a single acquirer has produced an average uplift of 27% against the opening offer (DealFlowAgent data). Most of that uplift is the sixth dimension at work: the same business, better sold.

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Two worked examples, with the arithmetic shown

Example one: the same £750K, priced £1.9M apart

Two UK businesses, each with £750K of defended EBITDA, both in the £500K-£1M band (4.5x-6.0x, monitored books to 7x).

Business A is install-led: project CCTV and access work re-tendered annually, maintenance ad hoc, attrition unmeasured, part of the alarm estate still signalling over analogue paths. Approached directly by one consolidator, it prices at the bottom of the band:

£750,000 × 4.5 = £3,375,000

Business B earns the same £750K with 45% monitored and contracted recurring revenue, NSI Gold scope, a documented URN estate, migration to dual-path signalling complete, attrition tracked at 7%, and a service manager who runs the diary. Taken to market with four bidders held in parallel, it prices where 40%+ recurring books reach:

£750,000 × 7.0 = £5,250,000

Same earnings, £1,875,000 apart, and every element of the difference (recurring share, attrition measurement, certification, signalling status, process) is a factor from the framework above, improvable in the one to three years before a sale.

Example two: £2M of EBITDA crossing the platform boundary

A commercial security business with £2M of defended EBITDA sits at the top of the £1M-£2M band. Sold well but positioned simply as a bolt-on:

£2,000,000 × 7.0 = £14,000,000

The same business eighteen months later, having grown defended EBITDA to £2.4M, evidenced a full second tier and been positioned to funds as a platform seed, the foundation a buyer builds a regional buy-and-build on, the way Ranger was underwritten, prices in the next band's upper reaches:

£2,400,000 × 7.5 = £18,000,000

Of the £4M difference, £2.8M is the extra earnings at the old multiple; the remaining £1.2M is multiple expansion from crossing the platform boundary. At £1.5M-£2M of EBITDA, the most valuable project in the business is usually the management hire and systems build that reclassify it in buyers' eyes, not the next contract win.

Where does your business sit on this ladder? The free calculator applies these bands and the factor framework to your numbers. 60 seconds, no obligation. Calculate my valuation

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2025-2026 transaction evidence: UK

Every row is a verified UK or Ireland electronic security transaction announced January 2025 to July 2026, with a clickable public source. Where a business combines fire and security, we say so; where consideration is not public we write undisclosed rather than guess.

What this table says when read together. First, one platform dominates the installer market: Ranger accounts for nearly half the rows, buying £1-10M revenue fire and security installers roughly monthly, and its June 2026 recapitalisation by Inflexion means that cadence is funded to continue. If a consolidator has approached you directly, this table is the reason not to negotiate alone. Second, the disclosed money is chasing monitored recurring revenue: the two largest prints of the window, ADT UK's £180M residential book (93% recurring) and Marlowe at 11.2x, both attach to contracted annuity revenue, and three different kinds of institutional capital (an ASX-listed monitoring group, a US fund in Netwatch, an infrastructure fund in WCCTV) all entered UK monitored security within eight months. Third, consideration disclosure is poor across the installer market, which is exactly why the ladder above leans on labelled calibration rather than pretending a UK multiples database exists.

Acquiring in security or building services? Register your acquisition criteria and we will match you to off-market sell-side mandates in your range.

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2025-2026 transaction evidence: US

The US market is deeper, more monitored-revenue-driven and better disclosed. Residential, commercial and monitoring rows are labelled: they price differently.

What this table says when read together. Three markets are visible. The monitored/residential market produced the biggest numbers (SimpliSafe ~$2.5bn, the Monitronics account-book trade, Becklar's wholesale monitoring consolidation) because the asset is pure RMR, priced on the Barnes conventions above. The commercial integration market is consolidating under long-hold institutional capital: Convergint's $850M continuation vehicle and Security 101's sponsor-to-sponsor trade show funds extending, not exiting, their integration bets. And strategics keep paying for technology position: Motorola, ASSA ABLOY and Allegion made repeated acquisitions, with ELATEC's disclosed ~5x revenue the clearest mark of what access-control technology commands versus installation labour. For a UK owner the read-across is the same one the UK table shows arriving: monitored annuities attract dedicated capital, integration attracts platforms, and pure install attracts neither at premium prices. Pye-Barker itself, the sector's most acquisitive platform, is reported to be weighing a sale, which would be the sector print of 2026 if it lands.

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2026 demand drivers and the consolidation map

Buyers pay premium multiples when demand is statutory, insurer-mandated or structural. This trade currently has all three, each verified against a primary source as of July 2026.

Martyn's Law: a compliance market with a start date

The Terrorism (Protection of Premises) Act 2025 received royal assent on 3 April 2025, with statutory guidance published April 2026, the SIA confirmed as regulator, and commencement expected Spring 2027 (a date still to be fixed by regulations). Standard tier premises (200-799 capacity) must notify the SIA and put evacuation, invacuation, lockdown and communication procedures in place; enhanced tier premises (800+) must document protective and monitoring measures under an accountable senior person. Two honest notes: the Home Office stresses that no specific products are mandated, so vendors overclaiming "Martyn's Law requires CCTV" will get found out; and yet the practical effect is real, because procedures need surveying, lockdown needs access control that actually locks, and enhanced-tier documentation needs someone competent to produce it. For integrators, that is survey, upgrade and compliance-audit revenue across hundreds of thousands of qualifying premises, starting now as duty-holders prepare.

The PSTN switch-off and the death of Redcare: signalling as a revenue event

The analogue phone network that legacy alarm signalling relies on switches off on 31 January 2027, with more than 2.8 million lines still to migrate in early 2026. BT Redcare, once the premium signalling brand, closed with services ending August 2025 and the network shut in December 2025, pushing an estate of premium fire and intruder connections onto CSL, AddSecure and peers. Every remaining analogue-signalled system must be re-terminated on dual-path IP/4G before the deadline, and insurers (Aviva among them) have warned policyholders that cover depends on maintained signalling. For installers this is one-off migration revenue that converts into recurring signalling contracts; for buyers, an estate already migrated is an asset and an analogue estate is a bill. The fire-system side of this story is covered in our fire safety guide; the security angle is the one above.

Police response, URNs and ECHO: the certification moat

Under NPCC policy, police unique reference numbers are issued only to systems installed and maintained by NSI or SSAIB certificated firms, monitored by approved ARCs with sequential confirmation. That makes certification a licence to sell police response, and a URN book a regulated asset a buyer cannot replicate quickly. Layered on top, ECHO (automated alarm-to-police call handling) is live with 13 forces connected and 11 more with interfaces installed; ECHO-connected monitoring is becoming a competitive differentiator for ARCs and the installers who route through them.

Surveillance, data and AI video

The ICO's surveillance guidance, the phasing-in of the Data (Use and Access) Act 2025 and the still-developing legal framework for facial recognition make compliance a durable service line for integrators (DPIAs, retention policies, signage, necessity assessments), while cloud video and access-as-a-service continue converting hardware installers into recurring-revenue businesses: vendor-commissioned research puts VSaaS at ~$12bn globally by 2032 (treat forecasts as directional). The commercial point is the one this whole page makes: subscription lines are what move a security business up its valuation band.

US read-across

The US shows where the UK market goes next: the AVS-01 alarm scoring standard and city-level verified-response policies (Seattle stopped responding to unverified burglar alarms in 2024) are pushing monitoring toward verification technology and certified centres, while the FCC's accelerating copper retirement forces rolling communicator migrations, the American cousin of the PSTN story. Both favour scaled, certified monitoring platforms, which is precisely who is buying in the US table.

The consolidation map: who is actually buying

UK and Ireland, verified active 2025-2026: Ranger Fire and Security (Inflexion; ~11 deals in the window, the dominant installer consolidator), Mitie (post-Marlowe, integrating), Croma Security Solutions (AIM), Amthal (founder-led), Fortus (Goodbody Capital), Senseco (Foundation Investment Partners), Connelly (family, Scotland), plus new monitored-book capital: Intelligent Monitoring Group (ASX), GI Partners (Netwatch), Arcus Infrastructure (WCCTV). Spy Alarms (Phoenix Equity) remains funded for bolt-ons. US: Pye-Barker (Leonard Green/Altas + ADIA/GIC; 57 deals in 2025), GTCR (SimpliSafe + Everon), Convergint (Ares-led CV), Security 101 (Morgan Stanley Capital Partners), Securitas Technology, Becklar, Guardian Protection, and the strategics: Motorola Solutions, ASSA ABLOY, Allegion, Alarm.com.

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What kills the multiple

The mirror image of the factor framework: the six findings that most reliably cut offers, written as the buyer's investment committee actually reasons.

1. Unmeasured attrition. "We are being asked to pay a premium for a monitored book whose melt rate nobody can state. Published industry attrition runs around 10-12%; if this book is worse, the annuity we are underwriting halves inside five years. No data means we assume the bad case." A churn number, even a mediocre one, always beats no number.

2. An analogue signalling estate. "A third of the connections still signal over PSTN paths that die in January 2027. Every one needs an engineer visit, new hardware and a customer conversation we might lose. That is a migration bill and a churn event we inherit, so it comes off the price." An estate audit showing migration complete converts this from discount to premium.

3. Install-heavy mix. "Seventy per cent of revenue is project work re-tendered annually. We underwrite the monitored and contracted base and treat the rest as cyclical volume." Install-led businesses price toward the bottom of every band on the master table.

4. Certification and URN gaps. "The NSI scope lapsed, two URNs were withdrawn after false-alarm strikes, and maintenance records are patchy. Police response is part of what we are paying for, and the regulated asset is impaired. Everything else in the data room is now less credible too." Compliance gaps are priced twice: as risk, and as doubt.

5. The founder as keyholder-in-chief. "The owner personally holds the ARC relationship, the biggest client relationships and the 2am escalations. The business we are buying degrades the day they stop. Either the price reflects that or the structure does: heavier earn-out, longer handcuffs." Founder dependency converts completion cash into deferred, conditional money.

6. One client, weak paper. "Thirty-five per cent of revenue is one retail estate on the client's terms, 60-day notice, no indexation, and the wage floor rises again in April. If they re-tender after completion our thesis is gone, so we price as if they will." Concentration on strong, indexed, assignable terms is manageable; on weak terms it is the biggest single discount in the trade.

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Deal structure by size: headline price versus cash at close

The multiple sets the headline; structure decides what you bank. The published evidence: at the small end, US Main Street deals complete at 76-89% cash at close with seller notes at 9-14% and earn-outs used sparingly (IBBA, all sectors). In the mid-market, earn-outs featured in 24% of 2025 US private deals (SRS Acquiom) and 27% of European deals, the equal-highest ever recorded (CMS), with 39% of UK advisers reporting increased earn-out usage (Dealsuite). Escrows featured in 88% of US deals. Security-specific wrinkles: monitored books often carry deferred income from annual billing, which buyers treat as debt-like unless the treatment is agreed in the letter of intent, and account-book deals (the Monitronics/Guardian pattern) transfer at prices tied to attrition guarantees, effectively an earn-out by another name. Rollover equity in platform deals typically runs 10-30% of proceeds (adviser consensus; no primary dataset, house view). Our standing advice: negotiate structure as hard as price; a headline at 60% cash with a two-year earn-out on the buyer's accounting policies can be worth less than a smaller number with 95% at completion, and the levers that keep consideration in cash (management depth, measured attrition, defended EBITDA, a live underbidder) are the same ones the factor framework scores.

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UK versus US: what actually differs

Three implications for a UK owner. First, the RMR conventions are American, but the appetite is now global: an ASX-listed group, a US fund and an infrastructure investor all bought UK monitored books within eight months, so a UK seller with a measured, low-attrition monitored estate can now run a process that includes buyers who think in RMR terms, without pretending a UK convention exists. Second, certification is a moat the US mostly lacks: NSI/SSAIB scope plus a URN estate is a national, transferable, insurer-recognised asset, and it is priced. Third, the signalling cliff is a one-time sorting event: between now and January 2027, migrated estates get premium treatment and analogue estates get discounted; on this one item, timing your sale after completing the migration is worth real money.

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Frequently asked questions

How much is my security business worth in 2026? UK security businesses are priced on defended EBITDA. Businesses between £250K and £2M of EBITDA typically transact between 3.5x and 7.0x depending on size, monitored recurring share and process, with monitored, certificated books at the top of each range and install-led businesses at the bottom. Above £3M of EBITDA, platform-grade businesses reach 6.5x to 10x. Owner-operated businesses below roughly £250K of earnings price on SDE, typically 2.0x-3.0x. The full ladder on this page shows the evidence behind each band.

What multiple do security companies sell for? Most UK small and mid-sized security businesses sell between 3.5x and 7.0x EBITDA, with monitored recurring revenue the strongest single driver. US evidence supports 7x-10x for platform-ready businesses with 40%+ recurring revenue and low attrition; UK pricing runs somewhat below headline US levels but is rising as international capital enters the market.

How are alarm monitoring contracts valued? In the US, monitored account books trade on a published convention of roughly 36x to 46x recurring monthly revenue depending on seller size, underpinned by ~51% monitoring gross margins and the roughly $28 cost of creating $1 of new RMR. In the UK no equivalent convention is published: buyers price monitored books through the EBITDA multiple, with a premium for contracted, indexed, low-attrition revenue, and sophisticated buyers model the book separately. Either way, the sellers who get paid best are the ones who can evidence MRR, attrition and revenue per connection.

What attrition rate do buyers expect? Published industry actuals run around 10.5% (TMA survey average), with well-run large books at 12-13%. Buyers price down sharply above roughly 10-12% net attrition, and the sub-5% figures often quoted are broker targets rather than market norms. The more important point: unmeasured attrition is priced as if the answer were bad.

Does the PSTN switch-off help or hurt my valuation? Both, depending on where your estate stands. Migration to dual-path IP/4G signalling ahead of the 31 January 2027 switch-off is one-off revenue and converts customers onto stickier recurring contracts; an estate still on analogue paths at sale is a cost and churn risk the buyer deducts. BT Redcare's closure has already forced the premium end of the market to re-signal once.

What is Martyn's Law and does it affect my business's value? The Terrorism (Protection of Premises) Act 2025 creates duties for venues from 200 capacity upward, expected in force Spring 2027, with the SIA as regulator. It does not mandate specific products, but it drives surveying, lockdown-capable access control, and compliance documentation demand across qualifying premises. A security business positioned to deliver that work has a growth line buyers can underwrite.

Should I sell my security business now? The buyer pool is the deepest it has been: a funded consolidator buying monthly, PE platforms, listed strategics, and three new kinds of monitored-book capital that entered the UK within a year. Preparation is the deciding variable: contracted recurring revenue, measured attrition, completed signalling migration, certification in order, and a competitive process capture the top of the band; an unprepared business approached by a single buyer does not.

How long does a sale take? Typically 6 to 12 months from launch to completion, lengthening with size. The two biggest schedule risks are an EBITDA bridge that fails quality-of-earnings review, and missing operational data (attrition, contract terms, signalling estate, URN status) that buyers must reconstruct. Sellers with the data room ready before launch routinely complete a quarter faster.

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Glossary

• ARC: alarm receiving centre, the monitored end of every police-response alarm.
• Attrition (net): the annual rate at which recurring revenue melts; the key input to any monitored-book price.
• AVS-01: the US alarm validation scoring standard grading alarm probability for police response.
• BS 7858: security screening standard for personnel; a prerequisite for monitoring operations.
• BS 8418: the standard for detector-activated remote CCTV monitoring; compliance lets a CCTV system hold its own URN.
• BS EN 50131 / PD 6662: the intruder alarm standards and grading framework (grades 1-4) that determine what risks a system may cover.
• Defended EBITDA: the adjusted EBITDA that survives a buyer's quality-of-earnings review; the number that gets priced.
• Dual-path signalling: alarm transmission over two independent paths (IP + 4G), the post-PSTN standard.
• Earn-out: deferred consideration contingent on post-completion performance.
• ECHO: automated electronic call handling between ARCs and police control rooms.
• Enterprise value (EV): the whole-business price before cash, debt and working capital adjustments.
• FSM software: field service management platform holding assets, scheduling and job history.
• MRR / RMR: monthly recurring revenue (UK usage) / recurring monthly revenue (US usage); the monitored annuity.
• NSI / SSAIB: the two UKAS-accredited certification bodies whose approval gates police URNs and insurer recognition.
• Platform / bolt-on: a PE-backed acquirer built to consolidate a sector / an acquisition made by one.
• PSTN switch-off: the retirement of the analogue phone network, deadline 31 January 2027.
• QoE: quality of earnings, the buyer-side review that tests adjusted EBITDA line by line.
• RMR multiple: US convention pricing monitored books per pound of recurring monthly revenue (currently 36x-46x).
• SDE: seller's discretionary earnings; profit plus the owner's full compensation, the small-business pricing basis.
• URN: unique reference number, the police-response registration attached to a certificated alarm system.
• VSaaS / ACaaS: video surveillance / access control as a service; the subscription models converting installers into recurring-revenue businesses.

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Methodology and sources

Rebuilt July 2026 from primary and named secondary sources, each checked in-run. No source publishes UK security multiples by size band; the master table is a DealFlowAgent tier view calibrated against the published evidence and the 37 verified 2025-2026 transactions above, and figures that are our own are labelled DealFlowAgent data. Where evidence is US-only, residential-weighted or blended fire-and-security, the copy says so.

Multiples and RMR: Barnes Associates via SecurityInfoWatch (ESX 2025) and SDM (Barnes Buchanan 2024, 2026); Capstone Partners Security Solutions M&A Update (Feb 2026); Houlihan Lokey Security & Safety Solutions Q4 2025; Wilson Partners Fire & Security Insights (2024); Grant Thornton UK Fire and Security M&A Review 2025; Lincoln International commercial security services (2025, market sizing); Breakwater M&A (Feb 2026, broker guidance); BizBuySell security benchmarks; IBBA Market Pulse (Q3, Q4 2025); Dealsuite UK&I Monitors; listed comparators via stockanalysis.com (retrieved 14 Jul 2026).

Transactions: Inflexion, Hyperion, LDC, GI Partners, Pollen Street, Mitie, Croma RNS/Investegate, PSI Magazine, Security Journal UK, Professional Security Magazine, International Fire & Safety Journal, Insider Media, Business News Australia/Wales, Pye-Barker and sponsor press rooms, PR Newswire, Business Wire, SDM, PE Hub, Gemspring, Ares, Allegion, ASSA ABLOY, Motorola Solutions, Keenfinity/Triton.

Regulation and demand: gov.uk (Terrorism (Protection of Premises) Act 2025 statutory guidance; SIA consultation), Openreach, AddSecure, Aviva Risk Solutions, NPCC Requirements for Security Systems 2024, ECHO, NSI, SSAIB, ICO (surveillance and AI/biometrics), TMA/UL (AVS-01), Seattle Times, FCC copper-retirement reporting, IBISWorld UK security system services, Parks Associates, MarketsandMarkets (labelled vendor research).

Deal structure: SRS Acquiom 2026 Deal Terms Study; CMS European M&A Study 2026; IBBA Market Pulse; Dealsuite; BizBuySell.

Update policy: master table, deal tables and regulatory calendar reviewed quarterly; next review October 2026. Report an error of fact and we will correct it within one working week.

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About DealFlowAgent

DealFlowAgent is a specialist sell-side M&A advisory for essential-services businesses, working deepest in building services (security alongside fire and life safety, HVAC, electrical and the compliance trades) and healthcare. Our advisers have completed transactions from £300K to £120M, and our registered network of 12,900+ acquirers across the UK and US (DealFlowAgent data) is matched to live mandates daily. Across our processes, a competitive, multi-buyer sale has produced an average uplift of 27% against the opening offer (DealFlowAgent data). If you want to test the market quietly, the 60-second calculator and a free matched buyer list are the self-serve starting points; when you are ready to talk, book a call.

If you advise owners in this trade. Accountants, solicitors, wealth managers, brokers and growth specialists refer clients to DealFlowAgent and earn up to 20% of our success fee on direct introductions, typically £15,000-£50,000 per closed deal, while staying the trusted advisor throughout. Details: dealflowagent.com/referral/advisors. Buy-side professionals can earn 15-20% referring owners outside their mandate: dealflowagent.com/referral/buyers.

Get my valuation · 60-second calculator using current 2026 multiples for your sector. https://www.dealflowagent.com/valuation?utm_source=valuation_guide&utm_medium=conversion_card&utm_campaign=valuation&utm_content=security-systems-multiples

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• •Direct sector exposure across fire protection, security systems, CCTV, access control and intruder alarms

Previously

Ranger Fire & Security · Complete Building Services · Compliance Group

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Joe Lewin

Founder, DealFlowAgent

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