Is anyone who has bought or sold monitoring accounts recently willing to disclose what multiplier for their monthly rates was used to establish the value of the accounts?
I've still got a few accounts I'm considering selling & need to know what a 'fair' figure would be. The accounts pay only for monitoring; no service contract is included in the monitoring fee.
Thanks,
Charlie
How long is your average contract? Is it an annually-renewing 1 year term? Need specifics.
I currently bill once per year. I also currently overpay for the monitoring (rates were set over a decade ago & I've never re-bid them), so whoever buys the accounts will clear more money than me, even if they don't up the rates at the end of the terms.
What would you pay for a profit of say, $140 a year, with no service contract involved, just monitoring? All my customers pay for service as needed.
Thanks, c
Stanley Barthfarkle wrote:
Most of my accounts were on annual contracts. Most were also long-term customers. I got 36 multiple. We billed annually in advance so that reduced the payout by roughly 6 multiple since we'd already received payment from the clients.
If I'd wanted to hold out I suppose I could have gotten more but I sold the business during my divorce and really just wanted to get it done. One guy I know who had 3-year recurring contracts was able to get 42 months less prepayments.
One of the issues will be the strength and assignability of your contracts. Another consideration will be the time you've held them. Longer is better, obviously. The types of hardware, service obligations, etc., can all come into play.
You might also want to chat with one of the companies that specialize in handling sales of alarm accounts to get an idea what they think your accounts are worth.
Good luck.
Hmmm...I've been out of active work in the alarm business since around '94 (all these accounts are at least that old); how do I contact these brokers?
The 1st offer I got was waaay less than what you mentioned so I figured it was worth asking here.
I'm grateful for the help.
Charlie
You must have done a good job if you've kept them all that long.
If the hardware is good quality, the workmanship clean and the contracts are solid, older accounts are often worth more than "average".
I have no affiliation with either of the following. This isn't a recommendation -- just information. The second link is to a firm that offers an alternative to selling your accounts.
"Charlie" wrote in message news:xDyGf.1230$ snipped-for-privacy@bignews5.bellsouth.net...
That is because he doesn't know his ars from page 8 about most of what he posts to. RLB has this never ending problem of being the industry mavin. In other words, he has a story, an opinion or some sales pitch for every item that pops up here. Some of what he says is true, which, by just hanging out here gets him some knowledge, but as far as putting to much faith is what he says, my suggestion is to get a second opinion.
There is alot to consider by both parties and the market has it peaks and valleys. There are people funding accounts, and people buying companies. The big competition to buy accounts between some of the bigger companies has slowed a bit, so those high multiples are hard to find. To tell you the truth, if your accounts are relation type accounts, you may not want to sell to these type companies anyway. The next item is the amount of accounts you have. The multiple is higher for larger volumn. The language contained in the contract is important. Are they, contractually, assignable? Do they contain limits of liability, third party indemnification, ect.? Do you have service records on these accounts? Do you have alarm activity records on these accounts? Do you have AR records on these accounts? Are they residential or commercial or what percentage of each? If commercial, are any of them UL certified? Are there radios or cell units on these systems? New contracts are worth more than ones that are in a renewal cycle. What I am getting to is that multiples will ultimately be decided upon, after there is a due diligence exercise. There will be (usually) a hold back on what ever multiple is agreed upon. If you do not stay involved, through this hold back period, don't expect it to be there after the term expires. There will be fall out and the other company will charge you back for these. By you staying involved to actually handle your account base for the buying company, through the hold back period, will eliminate the majority of this. Bottom line is there is no cut and dry answer to your question. It is a supply and demand type scenerio. Presently, I have heard of 24 to 32 times from ligitimate buyers. Anything higher is most likely a tickler to get in the door and ends up less after due diligence. The only two deals that were a ligitimate 42 times were from Devcon with a 50 million dollar and a 65 million dollar acquisition, and there were two full blown UL central stations that went along with the deals. At any rate, before you start talking to mulitple people, get a confidentiality agreement signed from each, because they will be into your records.
Good Luck!
Where are you located?
So what's the difference between what I do at
snip You're repeating yourself, Grams. Getting old's a bitch, eh? js
I would like to give you a warning. Robert Bass likes any new comers to this group to think that he is an authority on everything. I would suggest that you be wary of his seemingly helpful guise. In spite of the fact that he's built a large web store, he does not install systems, has no affiliations or association with the alarm installation trade, is unlicensed, only sells parts and hasn't even touched an alarm part for 5 or more years, much less know anything more about the installation trade, than what he picks up here. He has no warehouse and no actual store or business from which he conducts business. He simply works from his home and has all parts shipped from various vendors around the country. He used to own a small alarm company and if he EVER got a 42 multiple on his accounts, I'd suspect that he got it at gun point. You see, in addition to his deplorable conduct here, he's a convicted felon for a gun crime and is also responsible for someones death. By the way, if this weren't true he would be able to sue me or at least deny it. He can do neither.
His reputation here is deplorable. If you would care to do a search you will see that , he constantly ridicules and argues any point made by anyone else or with anyone who would make other suggestions. His sole purpose here is to sell equipment and tries to accomplish that by ridiculing installation companies and acting with a pompous and arrogant attitude. If you take the time to peruse the postings in this group, you will see that he has caused turmoil and disruption in this group and a few other groups and has done so for years and years. 90% of the flames that occur in this group are directed at or caused by him.
There is not a participant in this group who doesn't help people who come here seeking advice but they do not disparage the installation trade or ridicule competitors out of shear arrogance and greedy self interest, as Bass does.
Bob Worthy has given you some good an more realistic advice.
I would like to give you a warning. Robert Bass likes any new comers to this group to think that he is an authority on everything. I would suggest that you be wary of his seemingly helpful guise. In spite of the fact that he's built a large web store, he does not install systems, has no affiliations or association with the alarm installation trade, is unlicensed, only sells parts and hasn't even touched an alarm part for 5 or more years, much less know anything more about the installation trade, than what he picks up here. He has no warehouse and no actual store or business from which he conducts business. He simply works from his home and has all parts shipped from various vendors around the country. He used to own a small alarm company and if he EVER got a 42 multiple on his accounts, I'd suspect that he got it at gun point. You see, in addition to his deplorable conduct here, he's a convicted felon for a gun crime and is also responsible for someones death. By the way, if this weren't true he would be able to sue me or at least deny it. He can do neither.
His reputation here is deplorable. If you would care to do a search you will see that , he constantly ridicules and argues any point made by anyone else or with anyone who would make other suggestions. His sole purpose here is to sell equipment and tries to accomplish that by ridiculing installation companies and acting with a pompous and arrogant attitude. If you take the time to peruse the postings in this group, you will see that he has caused turmoil and disruption in this group and a few other groups and has done so for years and years. 90% of the flames that occur in this group are directed at or caused by him.
There is not a participant in this group who doesn't help people who come here seeking advice but they do not disparage the installation trade or ridicule competitors out of shear arrogance and greedy self interest, as Bass does.
Bob Worthy has given you some good an more realistic advice.
Well, ya see there is a difference.
I don't have a choice.
You choose to be a c*ck sucker. And also it's unsanitary and you don't care.
Cabling-Design.com Forums website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.