One of the most common questions we receive from security business owners in Canada is: 'How much is my business worth?' The answer depends on the type of security business you operate, the quality and predictability of your revenue, and the condition of your operations. This guide, prepared by the CMBB team led by Leonardo Obodoeke, explains the valuation methodologies used in the Canadian security industry.
RMR Multiples for Alarm Monitoring Companies
For alarm monitoring companies, the primary valuation metric is a multiple of recurring monthly revenue (RMR). The applicable multiple is driven by several factors: contract length (longer is better), annual attrition rate (lower is better), account type (commercial accounts command higher multiples than residential), geographic concentration (local concentration is preferred over widely dispersed accounts), and monitoring type (proprietary central station monitoring commands a premium over third-party monitoring). CMBB will explain the specific factors driving our offer when we present our valuation.
EBITDA Multiples for Security Integration and Fire Protection Companies
For security integration, access control, and fire protection businesses, the primary valuation metric is EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) multiplied by an industry-specific multiple. The following factors drive the multiple higher: a high proportion of recurring service revenue, a diversified customer base with no single customer dominating revenue, a skilled and licensed technical team, and a strong track record of contract renewals. CMBB will explain the specific multiple we apply and why when we present our offer.
Asset-Based Valuation for Equipment-Heavy Security Businesses
Some security businesses — particularly those with significant inventory, vehicles, and installed equipment — may also be valued on a net asset basis. This approach is most relevant for businesses with a large installed base of equipment at customer sites, where the replacement value of the installed equipment is a significant component of the overall business value. CMBB considers all three valuation approaches — RMR multiples, EBITDA multiples, and asset-based valuation — and presents the methodology that best reflects the true value of your business.
Getting a Free Valuation from CMBB
CMBB, led by Leonardo Obodoeke and supported by advisor Darie Urbanky — former President and COO of CI Financial Corp. — offers confidential, no-obligation valuations for security businesses across Canada and the United States. Our valuation process is transparent: we will explain exactly how we arrive at our offer, what assumptions we are making, and what factors could increase or decrease the final purchase price. There are no fees, no obligations, and no pressure to proceed.
If you would like to understand what your security business is worth, CMBB would welcome a confidential conversation.
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