Fire Protection Services Company Specializing in Sprinkler, Alarm, and Extinguisher Compliance
This article outlines a deal structure and growth plan for acquiring a commercial fire protection services company that installs, inspects, and maintains fire sprinkler systems, alarms, extinguishers, and backflow devices for industrial, multifamily, and institutional clients. Operating under local and national fire codes (NFPA), this business serves property managers, government agencies, school systems, factories, and commercial landlords. Most clients require annual or semi-annual inspections to remain code-compliant, with recurring contracts tied to legally mandated safety cycles.
The company generates $6.25 million in annual revenue and $1.31 million in adjusted EBITDA. Approximately 68% of revenue is recurring through inspection and maintenance contracts. The rest comes from new system installs, emergency repairs, extinguisher recharges, and code violation remediations. Technicians hold multiple state licenses and work from a centralized facility with fully stocked vehicles, fire extinguisher recharging bays, and a small fabrication shop for piping and brackets.
Given its regulatory necessity, skilled labor base, and long-term contract structure, this business is a textbook SBA 7(a) acquisition candidate. A new owner can scale through vertical integration (e.g., adding backflow testing or monitoring services), tuck-in acquisitions of niche operators, or geographic expansion into underserved counties where local firms lack in-house inspection capability.
Proposed SBA 7(a) Deal Structure
With strong recurring contract value and trained labor, the company supports an SBA 7(a) structure:
Purchase Price: $5.24 million (4.0x EBITDA)
SBA Loan: $3.93 million (75%)
Buyer Equity Injection: $524,000 (10%)
Seller Financing (Subordinated): $786,000 (15%) amortized over 6 years with 12-month interest-only
Protective clauses:
25% clawback on seller note if inspection contract renewals fall below 90% in the first 6 months
$60K performance bonus if buyer adds $500K+ in new recurring service contracts in year one
Seller to remain on for license supervision, training, and bid submission consulting for 9 months post-close
Customer Base and Revenue Composition
Client mix:
Multifamily and HOA properties: 27%
Government and municipal facilities: 19%
K–12 and university campuses: 16%
Manufacturing and warehouse complexes: 14%
Hospitals and healthcare facilities: 11%
Office buildings and commercial parks: 8%
Retail and mixed-use properties: 5%
Revenue segments:
Annual/semi-annual inspections: $2.65M
Emergency repairs and service calls: $1.05M
Fire extinguisher sales and recharges: $850K
System installation (sprinkler, alarm, backflow): $1.2M
Violation remediation and certification filing: $500K
Contract duration ranges from 1 to 3 years, with embedded renewal terms and annual increases indexed to CPI or labor cost. Most inspections are billed monthly or quarterly with work pre-scheduled 30–90 days in advance.
No client accounts for more than 6% of revenue. Top 75 clients comprise 62% of total revenue.
Technician Licensing and Workforce Infrastructure
Personnel:
5 licensed sprinkler and alarm inspectors
4 repair technicians (alarm panels, backflow, suppression systems)
2 fire extinguisher specialists with recharge certifications
2 junior apprentices in training
2 dispatch and customer service reps
1 general manager (non-owner)
All techs are licensed in at least one state and hold NICET Level I–III certifications. The company cross-trains staff in multiple service lines to reduce scheduling bottlenecks. Technicians input reports into a mobile field app, generating digital inspection logs for client compliance and insurance documentation.
Post-close labor plan:
Launch tech apprenticeship program with local trade school
Offer stay bonuses tied to client retention and zero-violation inspections
Recruit Level II sprinkler inspectors for territory expansion
Facility, Fleet, and Capital Equipment
Facility:
9,000 sq ft mixed-use warehouse and office space
Fire extinguisher recharge room (state-certified)
Small piping fabrication bay
Parts inventory and chemical storage
Admin offices, breakroom, and compliance file room
Lease: $6,750/month with 4 years remaining + 5-year extension option
Fleet:
8 service vehicles (2019–2023), all labeled and tool-equipped
FMV: ~$280,000
All have GPS and real-time route tracking
CapEx forecast:
Add 1 service vehicle to launch new metro route: $42K
Upgrade dispatch and inspection scheduling software: $14K
Replace 2 aging extinguisher recharge rigs: $18K
Sales Model and Market Penetration
Sales channels:
Direct proposals to property managers and facility directors
Bidding on municipal and public school inspection contracts
Partner referrals from general contractors and alarm installers
High-ranking SEO presence for “fire inspection + [city]” and “code violation repair”
Annual marketing spend: ~$40,000
Growth strategies:
Expand into counties with weak compliance coverage or fragmented technician base
Acquire one-person extinguisher outfits and roll their book into platform
Add UL-certified monitoring services for alarm panels
Launch bundled pricing (extinguisher + inspection + alarm service)
Build compliance assurance plan with auto-reminders and inspection forecasting
Financial Summary
Revenue: $6.25M
COGS (tech wages, parts, chemicals, licensing): $3.0M
Gross Profit: $3.25M
SG&A: $1.94M
Adjusted EBITDA: $1.31M (20.9%)
Margins by service:
Inspections: 60–65%
Emergency repairs: 55%
Fire extinguisher service: 70–75%
Installations: 45–50%
Code compliance filings: 85%+
Billing mix includes monthly recurring invoices, net-30 contracts for municipalities, and milestone billing for install projects. Emergency service calls are billed hourly with minimum thresholds.
Compliance, Licensing, and Legal
State fire marshal licenses for alarm, sprinkler, and extinguisher work
NICET-certified inspectors with documented continuing education
EPA and OSHA protocols for extinguishant storage and disposal
Fully insured: $2M GL, $1M auto, $1M umbrella, $1M workers comp
Clean record for the past 7 years no pending OSHA, EPA, or state code violations. All inspection records stored digitally and shared securely with clients and regulators.
Working Capital and Transition Budget
Payroll float: $120K–$140K
Vehicle and recharge equipment upgrade: $60K
Seller consulting and license bridge: $35K
CRM and dispatch software replacement: $15K
Territory expansion and marketing spend: $20K
Ideal Buyer Profiles
SBA-qualified buyers with B2B service background or compliance focus
PE-backed fire/life safety aggregators
Electrical contractors or sprinkler installers looking to vertically integrate
Route-based operators (alarm, HVAC, compliance firms) expanding into fire protection
Post-Close Execution Plan
Reintroduce firm to top 100 clients and assure license continuity
Launch recruitment campaign for apprentice techs and certified inspectors
Begin tuck-in acquisition campaign targeting $500K–$1M extinguisher firms
Deploy software for proactive inspection tracking and renewals
Bundle inspection and extinguisher recharging contracts to improve MRR
Conclusion
This fire protection services company represents a resilient and regulation driven platform for growth. With contractual inspections, high-margin extinguisher services, and a skilled labor force already in place, it offers the stability of recurring cash flow with multiple levers for geographic and vertical expansion. As regulatory pressures tighten, the need for competent, bundled compliance solutions grows and this business is positioned to lead. Through SBA 7(a) financing, a qualified buyer can acquire not just a business, but a critical public safety infrastructure asset.
