Alarm monitoring companies are among the most attractive acquisition targets in the security industry. Their value is predictable, recurring, and defensible — making them highly sought after by both strategic buyers and direct acquirers like CMBB. If you are a Canadian alarm dealer or monitoring company owner considering a sale, this guide will help you understand how your business is valued, what buyers are looking for, and how to achieve the best possible outcome.
Understanding RMR Multiples
The standard valuation metric for alarm monitoring companies is a multiple of recurring monthly revenue (RMR). The applicable multiple varies depending on contract length, attrition rate, account type (residential vs. commercial), and the quality of the monitoring centre. Installation and service revenue is typically valued separately on an earnings basis. CMBB will explain exactly how we value each component of your business when we present our offer.
What Buyers Look for in Alarm Companies
Sophisticated buyers evaluate alarm monitoring companies on five key dimensions: the quality and length of monitoring contracts, the annual attrition rate, the geographic concentration of accounts, the quality of the installed equipment, and the strength of the customer service operation. Buyers will also assess whether the monitoring is handled in-house or through a third-party central station — in-house monitoring commands a premium. CMBB conducts a thorough but transparent due diligence process and will explain exactly how we arrive at our offer.
Selling Alarm Accounts vs. Selling the Whole Business
Some alarm dealers choose to sell only their monitoring accounts — retaining the installation and service business — while others sell the entire operation. Both approaches are valid, and the right choice depends on your goals. Selling accounts only allows you to continue operating and generating installation revenue. Selling the whole business provides a clean exit and typically commands a higher total valuation. CMBB acquires both alarm account portfolios and complete security businesses, and will work with you to structure the transaction in the way that best serves your objectives.
The Tax Implications of Selling an Alarm Business in Canada
The structure of your sale — whether you sell shares or assets — has significant tax implications in Canada. A share sale may qualify for the Lifetime Capital Gains Exemption (LCGE), which can shelter up to approximately $1.25 million of capital gains per individual. An asset sale does not qualify for the LCGE but may offer other advantages depending on your corporate structure. CMBB's team, led by Leonardo Obodoeke, works with sellers and their advisors to structure transactions in the most tax-efficient manner possible.
If you own an alarm monitoring company in Canada and are ready to explore your exit options, CMBB would welcome a confidential conversation.
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