
Regional Security Alarm & Monitoring Business
This acquisition opportunity involves a regional provider of security alarm installation, monitoring, access control, and low-voltage systems integration. The company services both residential and commercial clients, with a particular strength in small to mid-sized retail, healthcare, and school accounts across a three-county area in the southeastern U.S. With a 28-year track record, the business combines alarm hardware sales, installation labor, monthly recurring monitoring contracts, and technical service revenue.
The company has built a base of over 1,200 monitored customers, including nearly 400 commercial accounts with multi-zone monitoring. It generated $4.1 million in total revenue in the trailing twelve months, with approximately $1.15 million of that derived from contracted recurring monthly revenue (RMR). Adjusted EBITDA was $815,000. The remaining revenue comes from new installations, retrofits, annual inspections, and repair service tickets.
Security alarm companies with a strong RMR base and minimal customer churn are highly SBA-financeable assets. However, licensing, central station integration, subscriber contract assignment, and regulatory oversight require strict attention in deal structuring. Any misstep in transferring customer monitoring agreements or loss of the central station relationship can materially impact the continuity of revenue.
Sample SBA 7(a) Transaction Structure
A properly protected SBA acquisition structure for this deal may look like:
Purchase Price: $3.2 million (3.9x EBITDA)
SBA Loan: $2.4 million (75%)
Buyer Equity Injection: $320,000 (10%)
Seller Financing (Subordinated): $480,000 (15%), amortized over 5 years with an 18-month interest-only period
Key clawback provisions on the seller note:
20% reduction if more than 10% of RMR is canceled or disrupted within 120 days post-close
15% reduction if central station vendor contract cannot be assigned or must be renegotiated at materially higher rates
Additional reduction tied to loss of specific commercial contracts marked as “key accounts” in due diligence
The seller should be retained under a 12-month consulting agreement and remain on record with the state licensing board until the buyer secures successor licensure.
Licensing and Regulatory Oversight
Security system businesses are subject to state licensing requirements for low-voltage installation and alarm monitoring sales. In most states, this includes:
Qualifying agent licenses for low-voltage or electrical systems
Background checks and fingerprinting for ownership and technicians
Local alarm ordinances for municipalities that track false alarms and permit compliance
Insurance and bonding minimums, often exceeding standard GL policies
The current owner is the qualifying license holder and must remain on file until a replacement is designated.
The buyer must:
Hire or promote a licensed technician who meets state qualifying agent criteria
Apply for a license transfer or new license at least 60–90 days pre-close
Structure a management services agreement with the seller, allowing him to remain the qualifying party during the transition
Many RMR contracts reference the specific license number of the selling entity—failure to transition licensing properly could result in notice-of-termination rights by customers.
Recurring Monthly Revenue (RMR) Breakdown
The company has approximately 1,200 monitored accounts, with 70% on ACH/autopay and average life-of-customer tenure exceeding 7 years. RMR totals approximately $95,000/month, made up of:
Residential monitored accounts: 510 customers, avg. $29/month
Commercial intrusion and fire systems: 410 customers, avg. $84/month
Integrated access control and cameras: 180 customers, avg. $110/month
Legacy takeover monitoring (resold systems): 100 customers, avg. $25/month
Contract terms typically include:
3-year auto-renewal with annual CPI escalator
60-day cancellation notice post-initial term
No refund for prepayment upon cancellation
Automatic late fee and suspension clauses
Buyers should perform an RMR roll-forward analysis to confirm:
Customer status (active, suspended, canceled)
Collection rate and delinquency history
Monitoring station billing and margin split (usually 15–30% of monitoring fee)
Equipment ownership (leased vs. sold outright)
Post-close, the buyer can optimize RMR through:
Upgrading older customers to smart panels with camera integration and higher ARPU
Introducing bundled offerings (e.g., alarm + access control + video)
Selling annual prepay monitoring at a discount to improve working capital
Technician and Staff Structure
The company employs:
6 W-2 field technicians (install, service, inspections)
2 lead techs trained in access control and fire systems
1 monitoring coordinator and 1 admin/CSR
1 part-time bookkeeper (outsourced payroll and AR)
Field techs are paid hourly with job bonuses for upsells or installs completed ahead of schedule. Turnover is low, and two junior techs are currently studying for low-voltage license exams.
Post-close staffing priorities:
Offer stay bonuses for lead technicians
Cross-train junior techs in IP camera installation and access systems
Upgrade job ticketing to FieldEdge or similar software for job profitability tracking
Set up a recurring training program on fire code updates and NFPA standards
Customer Base and Revenue Breakdown
Total revenue composition:
RMR: $1.15M (28%)
New system installs: $1.4M (34%)
Service calls and repairs: $620K (15%)
Access control and commercial integration: $930K (23%)
Client composition:
Commercial: 59%
Residential: 36%
Government/municipal: 5%
Commercial clients include medical clinics, logistics warehouses, daycares, multi-unit office buildings, and retail chains. Several clients are multi-site accounts with central billing.
Buyers should identify the top 20 clients by revenue and meet with them pre-close to confirm continuity. A commercial client relationship manager can be added post-close to grow these accounts.
Central Station Relationship
Monitoring is outsourced to a UL-listed central station under a private-label agreement. The current contract provides:
Tiered pricing ($5.50–$7.75 per account/month)
Branded call-in support using seller’s company name
Customizable event reporting
Redundancy across two call centers
Buyers must negotiate:
Assignment of existing contract
Confirmation of continued branding and account management
SLA compliance history (missed signals, false alarm calls)
Buyers can also evaluate in-sourcing monitoring in the long term or switching to a lower-cost monitoring partner if sufficient margin lift exists.
Sales and Marketing
The business does not currently employ a dedicated sales team.
New accounts come from:
Online search traffic and Google Ads ($2,500/month)
Referrals from builders, contractors, and property managers
Customer referrals and reviews (high retention, 4.8+ rating)
Direct RFP invitations for commercial systems
There is significant upside in:
Hiring a commercial sales rep focused on multi-site retail, clinics, and warehouses
Expanding into new construction through builder and GC relationships
Launching bundled “security + access + video” offerings for Class B commercial
Assets and Inventory
The company owns:
4 branded vans with secure shelving and stock inventory
Low-voltage tools, testers, cable stock, and fire system inspection gear
$80K of inventory: control panels, keypads, PIR sensors, batteries, cabling
No material CapEx is needed in the first year. Lease: 3,000 sq ft office with tech bench, dispatch room, and inventory storage. $3,900/month gross. Lease assignable.
Compliance and Legal Considerations
Buyers must diligence:
State licensing: low-voltage and alarm certifications current
Local municipal alarm permits (several jurisdictions require vendor registration)
Insurance: $2M GL, $1M E&O, $1M cyber, $1M auto
Bonding capacity for public or school jobs
Subscriber agreement enforceability and terms
There are no material lawsuits, license violations, or insurance claims in the past 5 years.
Working Capital Needs
Payroll: $55K–$65K biweekly
Monitoring pass-through: $25K/month
Inventory refresh: $25K–$35K
Software upgrades: $10K
Seller consulting: $20K–$30K over 6–12 months
Ideal Buyer Profiles
Low-voltage or security operators seeking regional expansion
Entrepreneurs with telecom or networking background
Trade consolidators (e.g., fire, HVAC, cabling) layering on RMR
PE-backed roll-up platforms targeting recurring subscriber bases
Post-Close Execution Plan
Assign subscriber agreements and monitor RMR retention
Meet all key commercial and government clients
Retain lead techs and qualifying license holders
Upgrade CRM and job ticketing for profit tracking
Launch commercial outbound sales strategy
Conclusion
This security and alarm monitoring company presents an ideal blend of recurring RMR cash flow, defensible licensing structure, and commercial client density. With an SBA-structured deal, buyer protections around licensing and RMR continuity, and a modest CapEx profile, the business offers a high-ROI path to stable income and long-term scalability. For buyers focused on telecom-adjacent services, commercial B2B routes, or blue-collar businesses with tech leverage, this acquisition is a strong platform with immediate cash flow and systems in place to scale.