What Are DIY Alarm Accounts Worth?

John Honovich

•Jun 23, 2017

IPVM

Attorney Ken Kirschenbaum guesses ~18x, nothing that there are many variables:

Some DIY contracts are for a term, 3 or more years, and others month to month. DIY systems may require pass-through the manufacturer's portal or receivers, and will not work without that, so the system becomes essentially worthless if the RMR is canceled. Other systems are self monitored through the internet and therefore no RMR for that feature.

A valuation of ~18x implies a drop of 50% or more in valuations relative to traditional alarm account valuations. That is a multiple of annual sales of 1.5x, getting close to the valuation of project based integrators.

What do you think? Concerned? Not?

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John Honovich

•Jun 23, 2017

IPVM

One (somewhat of a) counter example is Simplisafe's valuation. As explained in this post, Simplisafe is evidently able to maximize their valuation by showing statistical trends across all their accounts, even though they are all month to month. One thing Simplisafe has in their favor are a large amount of accounts to show more convincing statistical trends which may not be as convincing for a smaller dealer.

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Undisclosed Integrator #1

•Jun 24, 2017

A little over a year ago we sold a chunk of month to month real accou btw as we retooled for commercial focus. They sold for 24x. While not DIY, they were month to month with outdated radios.

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