B2B Commercial Fire Protection Services Company
This article details the acquisition opportunity and structuring strategy for a commercial fire protection services company that offers a full suite of inspection, maintenance, installation, and emergency repair services for sprinkler systems, fire extinguishers, alarm systems, backflow preventers, and fire suppression systems. The company has served its region for more than 30 years, operating across a three-county footprint and focusing exclusively on B2B clients, including warehouses, schools, office buildings, industrial plants, restaurants, and government facilities.
Annual revenue stands at $5.7 million with adjusted EBITDA of $1.21 million. Over 65% of revenue is derived from recurring inspection contracts governed by NFPA (National Fire Protection Association) regulations, which require quarterly, semiannual, or annual site visits. The remainder comes from repair work, system upgrades, retrofits, new installs, and one-time compliance remediation projects.
This business is an excellent fit for SBA 7(a) financing due to its contracted cash flow, essential nature of the service, and regulatory-driven demand. Additionally, buyers can grow post-acquisition through upselling inspection clients on deferred maintenance projects, expanding into new verticals (hospitality, assisted living), or acquiring smaller regional players and folding their contracts into the existing schedule.
Proposed SBA 7(a) Deal Structure
Due to its recurring compliance-driven revenue, multiple service lines, and clean financials, the business lends itself to a high-leverage acquisition:
Purchase Price: $4.95 million (4.09x EBITDA)
SBA Loan: $3.712 million (75%)
Buyer Equity Injection: $495,000 (10%)
Seller Financing (Subordinated): $742,500 (15%), 5-year amortization, 12-month interest-only
Protective measures and incentives:
25% clawback on seller note if more than 10% of recurring inspection clients cancel within 6 months
Seller earns a performance bonus if fire alarm division grows by $250K+ in year one
Consulting agreement for 9 months to support technician retention and AHJ (Authority Having Jurisdiction) relationships
Revenue Segmentation and Customer Base
Client types:
Industrial warehouses and manufacturing facilities: 30%
Schools, government buildings, and municipal sites: 25%
Commercial office buildings: 20%
Healthcare and assisted living: 15%
Restaurants and commercial kitchens: 10%
Revenue breakdown:
Recurring inspection contracts: $3.7M (65%)
System installation and retrofits: $940K (16.5%)
Emergency repair and violation remediation: $620K (10.9%)
Fire alarm testing/monitoring services: $440K (7.7%)
Inspection contracts are typically 1–3 years in length with auto-renewal provisions and standard quarterly or semiannual frequency. Clients are billed monthly or per-inspection depending on preference. Most clients require multiple services (e.g., extinguishers + sprinklers + alarms), which increases retention and revenue per location.
The top 40 clients contribute 55% of revenue; no client exceeds 5%. All contracts are assignable. Buyers should ensure all municipal and insurance-mandated inspection logs and documentation remain centralized and digitized.
Field Operations and Technician Management
The business employs:
12 licensed fire system technicians
2 licensed alarm specialists
1 NICET-certified system designer
2 dispatcher/schedulers
1 sales estimator
1 general manager
Technicians are cross-trained and certified in:
NFPA 10, 13, 25, 72 standards
Local state and county-specific certifications
OSHA and confined space entry (for large-scale retrofits)
Service delivery is managed through ServiceTrade, a platform for inspection scheduling, deficiency tracking, quoting, and compliance documentation. Buyers should ensure platform licenses are transferable and examine technician bonus structures tied to route efficiency and deficiency closeout.
Technician retention strategy:
Implement structured incentive plan for passed inspections and upsell conversions
Issue tenure-based quarterly bonuses for senior techs
Develop in-house licensing and training pipeline to reduce reliance on third-party training
Facilities and Equipment
The business operates from a 6,000 sq ft industrial office and warehouse:
Equipment storage (hoses, pipes, extinguishers, panel boards)
Fleet parking and maintenance bay
Fabrication workspace for sprinkler and backflow assemblies
Lease: $6,800/month, 3 years remaining with renewal option.
Fleet includes:
9 service vans (fully outfitted)
1 box truck for heavy parts delivery
FMV: ~$440,000 (owned)
CapEx:
$60K for 2 vehicle replacements over 18 months
$12K–$15K for software expansion and tablet upgrades
$8K for portable suppression demo tools for fire marshall training events
Sales and Marketing Strategy
The company does not employ dedicated outbound sales staff but receives consistent inbound demand from:
AHJ referrals after failed inspections
Insurance company recommendations
Property managers and construction groups
Website and Google Local traffic (4.9 rating)
Annual marketing spend: ~$3,500
Post-close growth strategies:
Hire dedicated account executive to convert one-time clients to recurring contracts
Launch “compliance-as-a-service” package (fixed monthly fee with bundled services)
Form partnerships with commercial GC firms for retrofit projects
Attend facility and property management conferences with live demos
Financial Performance
Trailing 12-month summary:
Revenue: $5.7M
COGS (labor, materials, parts): $3.12M
Gross Profit: $2.58M
SG&A: $1.37M
Adjusted EBITDA: $1.21M (21.2%)
MRR from inspections creates a stable baseline. Gross margins on inspection and monitoring exceed 65%, while installation and emergency services are in the 42–48% range.
AR aging: Majority of invoices paid within 30 days; schools and government contracts occasionally extend to net-45. No active collections issues. Payment plans available for large retrofits.
Legal and Compliance
Active state licenses for fire protection, alarms, suppression
OSHA-compliant safety documentation and vehicle inspection logs
Clean history: no lawsuits, compliance violations, or workers comp claims
Insurance coverage:
$2M GL
$1M auto
$1M workers comp
$1M E&O (particularly for alarm installation)
Buyers must confirm license transferability or plan for temporary responsible party designation during transition.
Working Capital and Transition Needs
Payroll float: $140K–$160K
Software and tablet upgrades: $15K
Technician retention pool: $40K
Seller consulting fee: $35K
Safety stock of extinguishers and system parts: $25K
Ideal Buyer Profiles
Facility services firms (HVAC, plumbing) seeking regulated recurring revenue
Security and alarm companies looking to vertically integrate fire systems
Entrepreneurs or PE-backed platforms rolling up compliance-based B2B services
Former public safety professionals entering private sector operations
Post-Close Execution Plan
Conduct individual meetings with top 25 clients and largest jurisdictions
Launch route efficiency analysis and crew pairing adjustments
Add alarm-only inspection route to boost service density
Deploy deficiency conversion campaigns with automated quote follow-ups
Explore targeted acquisition of 1–2 smaller fire protection players in nearby counties
Conclusion
This fire protection services company provides essential, contract-backed cash flow in a highly regulated niche with minimal discretionary volatility. With SBA 7(a) financing and seller support, a buyer can acquire a recession-proof service business, retain a skilled technical workforce, and scale regionally through compliance-driven inspections and retrofit project upsells. For buyers seeking sticky B2B accounts, high retention, and industry resilience, this business offers a strategic long-term platform.
