How Much Is a Security Alarm Business Worth in Australia?
A security alarm installation and monitoring business in Australia typically sells for between 2x and 4x normalised EBITDA. Businesses with strong recurring monitoring revenue — monthly contracts for alarm monitoring, CCTV surveillance and access control — command the upper end of that range. Some are valued on a recurring monthly revenue (RMR) multiple instead of EBITDA altogether, which can produce very different numbers depending on how the business is structured.
The spread matters. A security business doing $800K in revenue might sell for $400K or $1.2M depending entirely on whether the income is transactional or recurring. Understanding that difference before you make an offer is the whole game.
This is Module 4 of the Playbook — Valuation and Pricing — and it follows the same framework I use across all the trade-based valuations on this site, including how much a fire protection business is worth and EBITDA multiples for trades businesses broadly.
How Security Alarm Businesses Are Valued in Australia
There are two main valuation methods used in the Australian security sector, and which one applies depends on how the business makes its money.
EBITDA multiple: The standard approach for installation-focused businesses. A broker or buyer normalises the earnings (removing owner's salary, one-off expenses, personal costs run through the business), then applies a multiple based on size, risk, and growth profile. For security alarm businesses, that multiple typically sits between 2x and 4x.
Recurring Monthly Revenue (RMR) multiple: Used when the business has a significant monitoring book — a base of customers paying a monthly fee for alarm monitoring, CCTV or access control. Buyers pay a premium for this predictable income stream. The rule of thumb in Australia is 12x to 24x monthly recurring revenue for the monitoring book, valued separately from the installation and service operations.
The practical result: a business with $15,000 per month in monitoring contracts has a monitoring book worth roughly $180K to $360K before you even factor in the installation revenue and service work.
A broker I spoke with recently who works the Queensland market put it plainly: "The install side is a commodity. The monitoring book is what buyers actually fight over."
Typical EBITDA Multiples for Security Alarm Businesses
Here's how the multiples break down in practice:
Installation-only businesses (no monitoring): 1.5x to 2.5x EBITDA. These are essentially skilled-labour businesses with equipment — valuable, but with no recurring income they trade at the lower end. If the owner does most of the installs themselves, buyers discount further for key person risk.
Mixed businesses (installation plus monitoring): 2.5x to 3.5x EBITDA. This is the most common structure for small-to-medium security firms. The monitoring book underpins the valuation and justifies the higher multiple.
Monitoring-heavy businesses (monitoring is the majority of revenue): 3x to 4x EBITDA, plus a separate RMR multiple for the monitoring book. These are genuinely different businesses — closer to a subscription model than a trades operation — and buyers price them accordingly.
One important number to know: security businesses in Australia with under $300K in normalised EBITDA rarely trade above 3x regardless of quality. Buyer pool shrinks, lender interest drops, and the price adjusts to compensate.
Revenue Streams That Drive the Valuation
Security alarm businesses can have up to four distinct income streams, and each is valued differently:
Installation (residential and commercial): One-time revenue. Good margin if the team is efficient, but not recurring. Buyers count it but don't pay a premium for it.
Alarm monitoring contracts: Monthly recurring revenue. Prized. A well-run monitoring operation with low churn is the most valuable part of any security business. Contracts with three to five year terms and auto-renewal clauses are worth significantly more than month-to-month agreements.
Maintenance and service agreements: Annual contracts for system inspections, battery replacements, and call-outs. This is recurring revenue that buyers value second only to monitoring. If these are documented contracts rather than ad-hoc service calls, the multiple reflects it.
CCTV and access control projects: Often project-based commercial work. Valued on EBITDA margin; lower multiple than monitoring but higher than pure installation because of the follow-on service potential.
The mix matters enormously. Two businesses doing $1M in revenue can have very different values based entirely on how that revenue is structured. This is why you need to look closely at recurring revenue when buying a business well before you make an offer.
What Increases the Value of a Security Alarm Business
These are the factors that push a security business toward the top of its multiple range:
High proportion of recurring revenue. Ideally 40% or more of total revenue from monitoring and maintenance contracts. If the business would survive the owner taking a six-month holiday without revenue collapsing, it's worth more.
Long-term monitoring contracts. Three to five year terms with auto-renewal. Month-to-month agreements are worth a fraction of long-term contracts because a buyer acquires both the income and the risk of churn.
Low customer churn. Under 5% annual churn on the monitoring book is excellent. Industry average in Australia is closer to 8-12%. Sellers who can demonstrate low churn with actual data — not anecdotes — command a premium.
Current licences across all states of operation. Security work in Australia requires state-issued licences. A Master Licence in NSW, Victoria, or Queensland takes months and sometimes significant cash to obtain. A business with licences in multiple states has a genuine competitive moat that buyers value.
ASIAL membership and accreditation. The Australian Security Industry Association Limited accreditation signals quality to commercial customers and some government contracts require it. Membership is cheap to maintain but meaningful to buyers assessing risk.
IP-based technology, not analog. Modern IP-based alarm and CCTV systems are far easier to service remotely, integrate with monitoring software, and upgrade incrementally. A business running on legacy analog infrastructure faces significant capex to stay competitive — and buyers price that in.
Diverse client base. A mix of residential and commercial customers, spread across multiple industries and geographies, reduces concentration risk. One body corporate contract representing 25% of monitoring revenue is a red flag (though a very common one).
What Reduces the Value of a Security Alarm Business
Key person dependency. If the owner holds the Master Licence personally and all the commercial relationships, buyers need a long transition period and significant safeguards. Many add licence transfer conditions to the contract. Some walk away.
Aging equipment. A monitoring centre running on infrastructure from 2015 or a fleet of vehicles with 400,000km on the clock needs significant investment. Buyers either discount the price or request vendor finance to cover the capex.
Month-to-month monitoring agreements. If customers can leave with 30 days notice, the monitoring book is worth considerably less. The recurring revenue is real today but fragile tomorrow — and buyers know it.
Customer concentration. I looked at a security business last year where one strata management company represented 40% of monitoring revenue (the owner had done a great job of landing one very large body corporate group, which seemed brilliant right up until you thought about what happened if they switched providers). The buyer's offer reflected exactly that risk.
Expired or missing licences. This is an actual deal-stopper. Buying a business only to discover you can't legally operate it while you wait months for licence transfers is a serious problem. Due diligence on all licences — master licence, individual technician licences, and any relevant contractor licences — is non-negotiable before exchange.
Analog-only technology. Legacy analog systems are increasingly incompatible with modern monitoring software and customer expectations. A security business that hasn't invested in IP migration carries a technology discount.
Licence Considerations When Buying
This is the single most important due diligence item that catches buyers off guard in the security sector, and it's worth its own section.
Security work in Australia is licensed at the state level. The Master Licence (or equivalent) must be held by the purchasing entity or a responsible manager within it. If the current owner holds the Master Licence personally, it cannot simply transfer with the business — the buyer needs to have a qualified person in place or apply for a new licence.
In most states, licence applications take 60-90 days and require police checks, background verification, and sometimes industry experience evidence. That's 60-90 days you cannot legally operate. Some buyers resolve this with an extended settlement period; others negotiate an arrangement where the vendor stays on as a responsible manager during the transition (add this to the transition clauses carefully — it creates its own complications).
The practical advice: get a list of every licence held by the business, who holds them personally vs. the company, and what the transfer or re-application process looks like in each state. Do this in preliminary due diligence, not confirmatory.
This is covered in more detail in Module 5 of the Playbook — but it belongs in your pre-offer checklist too.
Real Numbers: What Buyers Pay in Australia
To make this concrete rather than abstract:
A small residential-focused security alarm business in regional Queensland or Western Australia, doing $600K in revenue with $120K in normalised EBITDA and $8,000/month in monitoring revenue — likely sells for $300K to $450K. Call it 2.5x to 3.75x EBITDA. The monitoring book adds some premium to a modest base.
A mid-sized commercial and residential installer in a capital city, doing $1.5M in revenue with $280K in EBITDA and $25,000/month in monitoring — likely sells for $800K to $1.2M. The monitoring book here is worth $300K to $600K on its own, sitting alongside the operational multiple.
A monitoring-focused business with limited installation — think 2,000 monitoring clients, $40,000/month RMR, minimal physical install work — could sell for $800K to $1M for the monitoring book alone, valued at 20x to 25x monthly recurring revenue. That's a different business entirely and attracts different buyers (often trade acquirers looking to bolt on a monitoring base).
For context on how these multiples compare to similar industries, the industry multiples cheat sheet covers security alongside 20+ other trade categories.
Is It Worth Buying?
Security alarm businesses are genuinely interesting acquisition targets for buyers who understand the recurring revenue model. The installation side is competitive and margin-thin, but a monitoring book is a genuinely durable income stream — customers who've had an alarm installed rarely cancel, and switching costs are real (a competitor has to come out and replace the hardware).
The licensing complexity is real but manageable with proper due diligence. The key person risk is common but solvable with a proper transition structure. The technology transition from analog to IP is a capex consideration, not a dealbreaker, for the right buyer.
The buyers who do best are those who can either bring operational skills (running a field service team) or who already have a related business and want to add the monitoring revenue. Pure financial buyers without any trade context tend to underestimate the licence and key person issues and pay the price later.
If you're evaluating a security business now, the asset sale vs share sale decision deserves careful thought — mainly because of how licences transfer differently under each structure.
Frequently Asked Questions
Is a security alarm business profitable in Australia? Yes, for businesses with a strong monitoring base. Pure installation businesses run thin margins (15-20% EBITDA margin is typical). Monitoring-heavy businesses can achieve 30-40% EBITDA margins because the recurring revenue requires minimal additional labour once the systems are installed.
Is the security industry growing in Australia? Yes. Commercial and residential demand for integrated security — alarm, CCTV and access control as a single system — has grown consistently. Insurance requirements increasingly mandate monitored alarms, which drives recurring contract growth.
How do I value the monitoring book specifically? Divide annual monitoring revenue by 12 to get monthly recurring revenue (MRR). Apply a multiple of 12x to 24x based on contract term length, churn rate, and technology quality. A book with long-term contracts and under 5% churn sits at the high end. Month-to-month agreements sit at the low end.
What due diligence should I do on a security alarm business? Licence verification across all states is the priority — who holds what, and what transfer looks like. After that: monitoring contract review (term, churn history, auto-renewal clauses), customer concentration analysis, equipment condition assessment, and technician licence verification for all field staff.
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