For alarm companies · Contract-backed value

Your contract portfolio is your biggest asset. Find out what it is worth.

Buyers price an alarm company on a multiple of recurring monthly revenue (RMR) that sits under a signed, transferable contract. A few short questions show you a likely range, what gaps in your paper are costing you, and what to fix first.

Gross RMR−RMR a buyer won't pay for=Qualified RMR×Multiple=Your range

A readiness estimate, not an appraisal. Nothing you type leaves your device.

Featured in Naomi Withers' session at TBFAA 2026 (Texas Burglar & Fire Alarm Association).

Loaded with an example dealer. Replace the numbers with yours.
Your recurring revenue

Monitoring, service and inspection RMR. Leave out one-time installation revenue.

Per account, per month. Communicator and service fees (Alarm.com, SecureCom, AlarmNet and others), cellular and radio charges, guard response. You bill it, but it isn't yours, and buyers don't pay a multiple on it. Add up a month of those bills and divide by your number of accounts. Rough guide: about $8 of a $38–45 residential account, about $20 of a $75 commercial fire account.

Wondering how to pull this from your bills? Different plans and communication paths bill differently, and it's easy to miss. Ask about a pass-through review.

What's behind the paper

"I think we had it" counts as no. If you'd have to go looking, estimate high. Government agencies on their own agreement don't count here if that agreement is on file.

Forms roughly 10+ years old, supplier boilerplate never updated, or anything that isn't an industry-standard form. A government agency's own agreement doesn't count as an old form.

What moves the multiple
Annual revenue attrition

The share of RMR lost to cancellations in a year. Most alarm companies run 8% to 12%, and many land at 9% to 11%: residential-heavy books run higher, commercial fire lower. From 10% up, expect a bigger holdback. 12% is widely treated as the industry line, some lenders write it into loan covenants, and above it buyers also pay a lower multiple.

Where most of your RMR comes from

Commercial and fire books command higher multiples and usually lower attrition. A mixed book is sometimes split and sold in pieces to different buyers.

Do you own your lines and receiver numbers into the central station?

If a buyer has to send a technician to every site to move your accounts, that becomes a point of negotiation. It usually means a lower value or fewer buyers. The estimator doesn't put a number on it.

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The evidence behind the numbers

How this estimate is built

1 · Qualify the RMR

Buyers don't pay for gross RMR. Sales tax and third-party pass-throughs come out first (for many dealers the pass-throughs alone are a sixth of RMR or more), and accounts without a producible contract or 90+ days past due are commonly excluded from the purchase price.

Government accounts are normally included. What gets discounted is a missing contract, so ask the agency for its own agreement and keep it on file. Some buyers still exclude government accounts, so treat them as a point of negotiation.

2 · Start from a size-based multiple

Recent industry data puts smaller dealers (under $50,000 RMR) at about 36× on average and larger ones (over $500,000 RMR) at about 46×. The estimator places your qualified RMR between those two points, then adjusts for account mix and attrition.

Mix matters: a mostly commercial and fire book can sit about 12× above a mostly residential one. Distressed books can trade near 24×, and exceptional ones occasionally approach 60×. The estimator treats anything above 52× as the exception.

RMR multiples are monthly: 36× RMR is about 3× annual recurring revenue.

3 · Apply documented deductions

  • Old or non-standard forms: an alarm-industry attorney's published valuation deducted 1× RMR when about 90% of accounts were on 10–15-year-old, non-standard contracts, and considered up to 5×. The estimator scales that to your share and shows the full span in the range.
  • Lines you don't own: the same attorney deducted 5× RMR for a dealer without its own lines into the central station. In practice it varies by buyer, because the fix is a site visit to every account. The estimator doesn't put a number on it: it flags it as a point of negotiation that usually lowers the value.

4 · Remember the structure

The headline price arrives in stages. Buyers commonly hold back 10% to 20% of it for roughly 12 months against attrition, released as accounts stay. Attrition drives the size of the holdback, and it's negotiable. The estimator uses 10% under 10% attrition, 15% at 10–11%, and 20% at 12% or more, where buyers also pay a lower multiple.

Attrition here means revenue attrition. Losing one large account can be 1% of accounts and 7% of RMR.

Benchmarks last verified . Mix and attrition adjustments are directional, scaled from the published sources described above; scaling the contract-form deduction to your share of RMR is our assumption and is shown openly as a range.

This is an educational readiness estimate, not an appraisal, a valuation opinion, or legal, tax or financial advice. It uses published industry benchmarks and the answers you give. Real offers depend on diligence into your contracts, financials, attrition history, market conditions and the buyer. Before you act, talk with an advisor and qualified counsel.

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Built by Naomi Withers, Growth Consultant Services, from ten years inside the machine: running finance and acquisitions at a top SDM 100-ranked alarm company.

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