Regional Fire Protection Services Company

This article provides a full-scale acquisition analysis of a regional fire protection services company focused on the inspection, maintenance, and repair of fire suppression systems, extinguishers, alarm panels, and emergency lighting. The business operates in a compliance-driven niche with regulatory obligations that create sticky, recurring revenue streams. Clients span multifamily apartment buildings, industrial warehouses, schools, medical offices, hospitality venues, and government buildings. The company holds multiple state licenses and NICET-certified inspectors, enabling it to serve both public and private sectors.

With $5.75 million in annual revenue and $1.22 million in adjusted EBITDA, the business services over 600 contracted accounts, many of which have multi-year compliance mandates tied to municipal fire codes. Approximately 80% of revenue is recurring—generated through quarterly, semi-annual, and annual inspection cycles, with the remainder coming from one-time system repairs and new device installations.

This business is an excellent SBA 7(a) candidate, combining predictable income, strong margin profile, low customer churn, and valuable licensing infrastructure. Post-acquisition growth can be driven through geographic expansion, bundling services, adding sprinkler system installation capabilities, and acquiring smaller unlicensed competitors.

Proposed SBA 7(a) Deal Structure

Because of the compliance-driven recurring revenue and technician infrastructure, this acquisition supports a traditional SBA 7(a) structure:

• Purchase Price: $4.88 million (4.0x EBITDA)

• SBA Loan: $3.66 million (75%)

• Buyer Equity Injection: $488,000 (10%)

• Seller Financing (Subordinated): $732,000 (15%) amortized over 6 years with interest-only for 12 months

Risk controls and seller incentives:

1. 25% clawback on the seller note if >15% of MRR terminates within 180 days post-close

2. $60K performance bonus if buyer retains 95% of recurring accounts by year-end

3. Seller to remain on license as Qualified Managing Employee (QME) for up to 12 months while buyer or designated tech becomes licensed

Customer Segmentation and Revenue Composition

Client breakdown:

• Multifamily and residential real estate portfolios: 31%

• Industrial warehouses and distribution centers: 20%

• Medical and dental offices: 16%

• School districts and colleges: 12%

• Hotels, resorts, and event spaces: 11%

• Municipal buildings (police, admin, libraries): 10%

Revenue streams:

• Fire extinguisher inspection, recharge, and replacement: $1.9M

• Fire alarm panel inspections and troubleshooting: $1.2M

• Emergency exit and e-light inspections: $860K

• Backflow prevention and sprinkler valve testing: $790K

• Repairs and parts replacements (alarms, pull stations, horns): $590K

• Emergency service calls (non-contract): $410K

Contract terms are annual or multi-year with automatic renewal clauses. Most are structured around municipal code requirements with mandatory quarterly or semi-annual visits. Clients are billed monthly, quarterly, or annually in advance.

Top 50 accounts represent 61% of total revenue. No single customer exceeds 6.1%.

Field Technician Infrastructure and Licensing

Labor and licensing:

• 7 licensed fire safety technicians (state-certified, NICET Level II or higher)

• 1 sprinkler and backflow tech (cross-licensed with plumbing background)

• 2 apprentice inspectors in training

• 1 dispatcher/scheduler

• 1 compliance coordinator

• 1 operations manager

Technicians are trained in alarm system inspection, code documentation, extinguisher servicing, emergency light testing, and digital report generation. All work is logged in inspection software with PDF reporting for AHJ (Authority Having Jurisdiction) audits.

Post-close labor and compliance strategy:

1. Retain existing techs with 12-month stay bonuses and advancement paths

2. Pay licensing fees and CEUs for 2 junior inspectors to attain NICET Level II

3. Hire one additional backflow-certified sprinkler tech to insource more repair work

Fleet, Equipment, and Facilities

Fleet:

• 8 service vehicles (2018–2023), GPS-tracked and fully stocked

• FMV: ~$315,000

• Vehicles include extinguishers, test meters, spare panels, and mobile recharge kits

Facility:

• 6,200 sq ft warehouse with:

  • Recharge station and hydrostatic testing room

  • Extinguisher inventory and part bins

  • Training bay with fire alarm mockups

  • Conference area and compliance center

CapEx needs:

• Replace 2 aging vans: $65K

• Add cloud-based compliance dashboard for clients: $9K

• Upgrade mobile inspection hardware: $12K

Lease: $5,100/month, 3 years remaining with 5-year renewal option

Sales and Marketing Engine

Current client acquisition channels:

• Referrals from fire inspectors, property managers, and general contractors

• SEO content for “[city] fire code inspection” and “NFPA annual test”

• Paid Google Ads targeting property compliance officers

• Local networking via BOMA and real estate events

Marketing spend: ~$42,000 annually

Expansion tactics:

1. Hire outbound B2B sales rep to target regional apartment owners and warehouses

2. Launch bundled “life safety” packages (fire + exit + e-light + alarm)

3. Acquire smaller unlicensed fire extinguisher service companies

4. Add retrofit alarm panel upgrades and sell annual testing packages

5. Expand into adjacent counties using traveling tech teams and remote report uploads

Financial Summary

• Revenue: $5.75M

• COGS (labor, parts, recharges, transport): $2.95M

• Gross Profit: $2.8M

• SG&A: $1.58M

• Adjusted EBITDA: $1.22M (21.2%)

Service line margins:

• Extinguisher service and recharge: 65–75%

• Alarm inspections: 55–60%

• Emergency lighting tests: 60–68%

• Emergency repair calls: 70%+

AR aging is minimal, with most contracts prepaid quarterly. Emergency work is billed net-15. Larger clients use PO systems or AP portals for approvals.

Compliance, Legal, and Risk

• Licensed fire protection contractor in good standing

• All techs NICET II or higher for alarm inspection

• EPA-certified for clean agent suppression refills

• OSHA-compliant with quarterly safety audits

• Fully insured: $2M GL, $1M auto, $1M workers comp, $1M umbrella

No open litigation or insurance claims. Clients include multiple state agencies and city departments with contract bid approval status.

Working Capital and Transition Budget

• Payroll float: $125K–$135K

• CapEx for vehicles and inspection tools: $70K

• Seller license continuity and advisory support: $40K

• Technician licensing and CEU budget: $20K

• Sales and market expansion campaign: $25K

Ideal Buyer Profiles

• Code-compliance service businesses (backflow, elevator, alarm)

• Licensed construction or electrical firms seeking recurring compliance revenue

• PE-backed platforms in building safety services

• SBA buyers with operations management experience

Post-Close Execution Plan

1. Secure license continuity and meet top 50 accounts with license transfer explanation

2. Promote junior inspectors and schedule licensing pathway

3. Audit client inspection history for bundling opportunities

4. Deploy mobile app for real-time inspection report delivery

5. Initiate acquisition talks with 2–3 smaller extinguisher-only service firms

Conclusion

This fire protection services business delivers recurring revenue, regulatory stickiness, and operational simplicity across hundreds of commercial sites. With a stable technician workforce and hard-to-replicate licenses, it serves as a predictable income platform with high margins and minimal customer churn. The SBA 7(a) buyer gains access to a compliance-driven growth opportunity in a recession-resistant niche one that rewards technician retention, bundling of services, and regional scale. With modest CapEx and strong branding in its territory, the business can expand through licensing leverage, route density, and accretive acquisitions.