Valuation BenchmarksMarch 2025 · 7 min read

Security Systems Business Valuation 2025: Alarm Company Multiples and RMR Value

Q: What is the MRR multiple for alarm company accounts?

Residential monitoring accounts sell for 28x–38x MRR. Commercial accounts sell for 35x–45x MRR. Low attrition and higher average monthly rates command the top of these ranges.

Q: Can I sell just my monitoring accounts without selling the whole company?

Yes — account acquisitions are common in the security industry. Buyers purchase the monitoring contracts at an MRR multiple. This lets you monetize your account base while potentially retaining the installation business.

Security alarm businesses are valued on monthly recurring revenue (MRR). Current multiples range from 28x–45x MRR. Here's how buyers value alarm companies.

Jason Taken

HedgeStone Business Advisors

Security alarm businesses are valued differently from other home service trades. Instead of SDE multiples, alarm companies are primarily valued using a multiple of Monthly Recurring Revenue (MRR) — the monthly monitoring fees from active accounts. Understanding MRR multiples is essential to getting a fair value for your alarm company.

How Alarm Companies Are Valued: MRR Multiples

The security industry standard is valuing an alarm business at a multiple of MRR (monthly monitoring revenue). Current market multiples: residential monitoring accounts: 28x–38x MRR. Commercial monitoring accounts: 35x–45x MRR (commercial accounts have higher average monthly rate and lower attrition). Mixed residential/commercial: 32x–42x MRR. Example: 500 accounts at $35/month average = $17,500 MRR × 35x = $612,500 for the monitoring revenue alone, before valuing installation and service revenue.

What Determines MRR Multiple

The MRR multiple depends on: account attrition rate (industry benchmark is under 12% annually — lower is better), average monthly rate per account (higher RMR = better quality accounts), contract term and expiration profile (3-year vs. month-to-month), account concentration (residential vs. commercial, geographic density), monitoring center arrangement (dealer accounts at a central station vs. owned monitoring), and whether accounts are UL-listed.

SDE-Based Valuation Crosscheck

For larger alarm businesses with significant installation and service revenue beyond monitoring, buyers also run an EBITDA analysis. The MRR multiple tends to drive value for smaller alarm companies (under $500K revenue). For larger businesses, the EBITDA multiple (5x–8x) may produce a higher value than MRR multiples alone, and sophisticated buyers will take the higher of the two.

Who Buys Alarm Companies

The most active buyers: regional alarm companies looking to add geographic coverage, national platforms (ADT authorized dealers, Vivint, Guardian), and private equity. Account acquisitions (buying only the monitoring contracts, not the whole company) are also common — this is how many alarm companies grow without M&A.

Frequently Asked Questions

What is the MRR multiple for alarm company accounts?

Can I sell just my monitoring accounts without selling the whole company?

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