Selling and Valuing Security Integrators

Author: Brian Karas, Published on May 12, 2017

This ia a tutorial in how to (1) determine your security integrator's value and (2) to sell your security integrator. If you own an integrator, want to buy one or even are thinking of starting your own one day, this is a must read.

We spoke with an M&A advisors Final Image and Reitman Consulting, both specializing in security integrator sales, about factors that impact the valuation of security integrator businesses.

This post covers:

  • How much an average security integrator is worth / can get in a sale
  • How much the sales price is driven by RMR
  • How to know when it might be time to sell your business
  • How long it takes to get a sale completed
  • How much it costs to hire an M&A advisor and prep for sale
  • What to expect after the sale

**** ** * ******** ** *** ** (*) ********* **** security **********'* ***** *** (*) ** **** **** ******** **********. If *** *** ** **********, **** ** *** *** ** even *** ******** ** ******** **** *** *** ***, **** is * **** ****.

** ***** **** ** *&* ************* *************** **********, **** ************ ** ******** ********** *****, ***** ******* **** impact *** ********* ** ******** ********** **********.

**** **** ******:

  • *** **** ** ******* ******** ********** ** ***** / *** get ** * ****
  • *** **** *** ***** ***** ** ****** ** ***
  • *** ** **** **** ** ***** ** **** ** **** your ********
  • *** **** ** ***** ** *** * **** *********
  • *** **** ** ***** ** **** ** *&* ******* *** prep *** ****
  • **** ** ****** ***** *** ****

[***************]

Valuing ** *********** ********

* ***** ******** ** ********** ***** ***** ** *.* ***** annual *****, ** ** ******, *** ** ******* *********** ********. For *******, ** ********** *****, ***, $** ******* ******** **** a **% ($*,***,***) ********* ****** ***** ******* * $* ******* sale (* ***** $*,***,*** ********* ******, ** *.* ***** $**,***,*** revenue).

* **** ******* *********, *** *** ****** ** ********* ******* would **** ** *** ***** ** ** *** * ******** of *** ********* ****** ** * ******** (** ******* *-** times) **** ****** ********* ****** ****** ***** **-**% ** *******.

******* **** ***** ***** ****** **********:

  • ****** ********* ******* ******* ********** (******* ** **** ****** *****)
  • ******** ******** **** ****
  • **** ****** ****
  • ****-*********** ****** ** ***** ** ******** *******

** *** ********, ***** ***** ****** *********:

  • ***** ** ********* *****/****** **** ** ***********
  • **** ** *** ********* (**** ** ******** ********* *** ********** annual *****)
  • ********* ** ******* ********** (** *** *** ** **** **** business ** * ****** ** *******)
  • ********** *** ******* (**** **** ~**% ***** *******)
  • **** ********** ** ******* **** * **** ***** ****** ** customers
  • ***** ******* ** *********

RMR ****** ** *****

*********** **** ****** *** *** **** *** *+ ***** **** of *********** **** ****** ***. *** ** ********** ****** ******* for *** ********, *** ** ** ****** **** ****** **** project ***** ***** **** ******* **** ** ****** ************, ***** customers *** *** ************* ********* ** *** *** ****** ********.

**%-**% ** ******* ** *** ** ********** * ******* **** in ***** ** ******** ********** ********* *** **** ******** ***** valuation. ******* ** *** *********** **** *** **** *% ** revenue **** *** *** ** **** ** * ******** ************** for *** ********.

******* ** $*,***,*** ** *** ******** ** **** **** ********* and ***** **** **** **** ******* $*,***,*** ** ******* *****, integrators *** ****** ** **** ***** ******** ** *** ****** need ** *********** ** ******** *** ***** ** *******.

*** ********** *** ********** *** *******, **** ***** *****, *** to ******* ******** ***** ** ******* ************.

*** *** *** ** ****** *******, *** *** ****-******/***-**** ********* like ***** ********** **** ** ****** ****** **** *** *** lower-margin ******** **** ******** *****, **** ** ******* **********.

Factors **** ***** *****

**** *******, **** ** ********* ***** ** *** ******* *** obvious *****-********, ******* ***** ****** **** ********** ****** ***** **** may *** ** ** ********.

** * ***** ******* ** *** *******'* ******* ***** ********* from * ***** ****** ** ********, **** ******* **** ********** be ********, ** *** **** ** ****** *** *** ** those ******** ***** **** * ***** ******** ****** ** *** business. **** ** * ******* **** **** ***** *********** *** have *** ** * *** ***** ******** **** ***** * significant, ** **** ****, *******.

********* ** ********* ****** ** ** *****, ******** ******* ****** that **** ********* ****** *** "**** ********" ** *** ********. This ** *** ** *** **** **** **** ********* ********* comes ******* ******* **** * ***** ******* ** **** ********* will ** *** ** ****, ***-**********, *******, ** ********* ***-********. It ***** **** ******** **** *** ********** ** *** **** to ******** **********, ** *** **** ******* ********* *** * project **** ***** **** *******. *** ***** ******* *********** ****** ensure **** **** *** *** ******** ****** ** *** ********* on ***** ***** ** **** *** ******** ** **** ***** company.

Individual ******** *** *** ******* ******

** ***** ***** *** ****** *********** **** ** *** ***** sold, *** ** ********** ******* ***** ** **** *** ***** shares ** ***** ** ****** ** ****** * ********* ****** that ********** **** ***** *** * ******* ***** *** ***** share, ********* ** *******. *** *******, ** *** ******* ** valued ** $*,***,*** *** ***** ** * ****** ******* *******, and *** ****** ***** *** ** *** ******** **** **** likely ******* * ***** *** **** **** $***,***. *** ******* for **** *** **** ***** ******* ****** **-**, ***** *********** ****** **** ********** **** *** "******* ****", and ** *** **** * **** ******** ****** *** ********** worth **** **** **** * ******** ** *** ******** ** sold ***. ** ***** *****, *** ********* **** ** *** a ******** ***** ** * ***** *******.

When ** *** ***** **** ** ****

** **** ******** ** ******** * ******* *******, ** *** be ** ********* **** *** **** ***** *** ******* ** far ** *** *** ** *** ******* *************. ****** ******* points ********* **** ****** * *** ******* *** *** ******* in ****** *****, ****** **** *** **** ** ****** ** other ******* **** ************* ** ********* *******.

* ******** ** ********* *****, ** ****** ********* **** *** significant *** **** **** **** **** ** ******** (>* ****) can **** ** ********** * ******** ********* **** *** *** a ********* ********* ** ** * **** **** ** **** a ****.

*********** *** **** ***** *** ******* ****** *** ******** **** indicates * **** **** ** *** ***** ******* ** *** sale. ** ***** ************ *** ***** ****, ****** ******* ** nationally, ** *** ** ********* **** ********* **** ****** ** capital *** ****** ************ ** **** ***** ** * ***** of ************** *********.

****** **** ** ***** ** *********** *** **** ******** ** is **** ** **** *** *******, *** ** **** **** more *** ******** ******* **** ******** ****. ** ******** *** see ********* ** ******* **** ******** **** ***** ************* ********** to ****** * ******** ******* *******. ****** ***** ********** ** this ****, ****** ** *** ** ********** ** ****** ****** the ******* ******* **** ** **** ** ******* ** **** afloat.

How **** ** ****

********** ** ********** **** **** *** ****** *******. ***** ***** recommended *********** **** * ***** *****, *** **** ** **** but ** *** *** ******** ** *** **** ******** ***** for ******* *********. ***** *** *** **** ******* ** *** company ** **** ******* *** *** ****** ** ******.

************ *** ******* *** ***** * **** ** ******* ** the *********** **** ** ******* *** ******* ** *** ******. Companies **** ***** ***** *** ** ***** ** **** ***** as *********** ** ** * ***-**** *** *********. **** **** identify ********* ******** **** *** ******** ***** ** *** **** time ** ******* **** ****** ******* ** ********* *********.

*** ******* ** ******* *** ******* ** *** ****** *** completing * **** *** **** *-** ******. **** ****** **** to **** **** ********* *********, **** **** **** ** ******** their *** *** ********* ******* ** ** ******* ********** *** come ** **** * *********, *** **** ********** *** ****** sale.

Advising / *********** ****

** ********** ***** *** ********* **** ***** ******** ** ***** own, ********* ** ***** ********* ********** *** ***** ****** ** prospective ******.

***** *** *&* ********, **** ***** ***** *** ******* **** help **** *** *******. ******** **** *****:

  • ***-**** *** ********* ******* **** ******* *** ******** *** **** up **** ******** *** *********** *** ********* ******* ***** **** typically **** $*,***-$**,***.
  • ********* ** "**** ****", ***** ** * ***** ***** **** on *** ******* ** **** ** ********* ********* ***** *** company. **** ******* *** ***** ******* $**,*** ** ***** ** complete.
  • ******* ******, ******* **** ************, ******* *** ****, ***. ********* is ******* ** * ********** ** ******* ***** ***** (******* from *-*% **** ***** ** **** ***** *** ****** ***********).
  • ************ *** ********* ******* ** ***** *** ********* ***** ** is ********* (*** ********, ********* ** *******).

Anyone *** ***** * ********

*********** ******* ** **** ***** ******** ****** ** ***** **** there ** ** ****** ********* *** *********** ** ************* **** provide ******* ********** ** **** *****. ***** *** *************, **** as *********** ******* ** ************ *********** ********* ** ******** *** ****** *********** ** ******* ********** *** ***** ******** in * ***** ****.

Post-Sale ************ / ****-**** / ***********

****** *** ********** ***** ** *********** ****** ****** ** ** required ** **** ** ***** *** ****. *** ********* *** considered ** ** * ***** **** ** *** ***** ** the *******, *** **** *** **** ** **** *** ******** is "******".

** **** ***** *** ******** *****(*) **** *** ** **** in **** **** *** **** ******, ******* ******* ** ****-*** over * *-* **** **** ****. ****** **** ****** *** owner(s) ***** *** * ****** **** *** ********* *******, **** their ****-*** ******* **** *** **** ** ************ **** **** agreed-upon ****. ****-**** *** ***** **** ** *********** ******* **** continued ****** ** ************* ** *** *******, *** ** ***** targets *** *** *** ***** ********* *** ******** **** ** adjusted **** ***********.

[****: **** *** ********** ********* ** **** *** ******* ** 2017 **** ******** ******* *** ********.]

Comments (10)

Undisclosed Integrator #1

07/21/16 04:12am

****** *** *** ****. **** ****** ****** *** *** ** course ** ******* ** *** *** ******. ***'* *** ***** a **** ******* ******* ** *** ****** * *?

**** ***** *** *** ** *** ******* *** ****** *** a ******** ******* ***** ********** ** ****?

John Honovich

IPVM | In reply to Undisclosed Integrator #1 | 07/21/16 07:02am

**** ****** ****** *** *** ** ****** ** ******* ** the *** ******. ***'* *** ***** * **** ******* ******* is *** ****** * *?

** ** *****, **** *******.

****'* * **** ***** ****** ** *******. ***** ***** ***** an ******* ****** ***** *** *********** ** **-**% **** ** average ********* ******** ** * - * ***** ******, ***** is *********** *.** *******. **** ** ********** **** **** ** have **** ** ****.

****** *** **** **** **** ******* *** **** ** ******** more ** ********** ******* (*.*., *** **** *** *** *** owner *** ***** ****** **** ******** / *******).

****, * ******* ******** ** ****** *** **** ****** ** understand **** ** ****** ***. ***, ** **** *****, ** acquirer **** ********* ********* ***** ******* *** ****** ********* ***********.

Undisclosed Integrator #1

07/21/16 08:38am

"** **** ***** *** ******** *****(*) **** *** ** **** in **** **** *** **** ******, ******* ******* ** ****-*** over * *-* **** **** ****. ****** **** ****** *** owner(s) ***** *** * ****** **** *** ********* *******, **** their ****-*** ******* **** *** **** ** ************ **** **** agreed-upon ****"

**** ****** **** * *** ****. ***'* *** ** **** a ******* **** **** $*** ** ***** *** **** **% profit **** * $**** ***** ******.******* ***** *** ** ****** at $*.**. ****** ***** **** *** **** *** * ***** and **** **** $****. ***** * *****, *** ******* ***** have **** $*.** ** *** ***** ** ** ****'* **** (that's ** *** ******* ** *** *******), ******* *** ***** with **** ** *** ** ******* ********* ***** ** ** getting *** ***** ** *******. **** ** * ******* ****? Would *** ****** ****** ** ********** ** $*.** ** ** was ***** ** ****?

Thumbnail brk1

Brian Karas

IPVM | In reply to Undisclosed Integrator #1 | 07/21/16 06:27pm

* **** **** ******** ** ***** *****, *** **** *** their ***** ********* **** ********:

*** **** ******* ** **** ** *** **** ** *** sale - *** ***** ***** **** ******** ** * **** amount ** *** ******** ***** - *** $* ******* ** this **** - ***** ** *** *** ** ******** ******* return. ** ******* - *** ******** ** **** ***** ** a ******** ** ******* ** **** - *** ** ** crystalizing *** ***** ***** **** *********. **** * ***** ***** be * **** ******* - ** ***** ********* *** * shorter ******* ****** ** * ** * ***** ***** ********* the ****.

******* *** ** **** ** ** ** **** *** ******* concept ** ********* **** ** ****** ** * ********* ****** number *** ******. ** - ***** ***** ******* ** ***** 4 * = $* *******. ****** ***** * ***** = 9 *******. **** ** ********** ** * ******* ** ***** plus * * **** ******* ** $*.* *** ****.

Tom Burns

In reply to Brian Karas | 07/24/16 10:46pm

** *** ** **** **** ** *******:

*** ** *** **** ****** ******* *** * ****** **** push *** * ****** ****** ******** ** ****** ******** (*.*., "Yes **. *****, *** ** ******* ** ***** **** ******* the *** ****** ****** **** ** '*' *** **'** ******* at '*'). ** ***********, ****'** ***** ** * **** ***** with ** *********** **** *** ******** ***** ** ******** ****** upon ****** ****** ******* *** ********.

*******, ***** **** ****** **** ******* ** *** **** ** yrs ** ******* *******, ********** **** *** ******** ******* ** to ** ********** **** *******- *** ****** ***** ********. *** often *** ****** **** ****** **** *** ********* ******* ********** impacted *** ******** (******** ********* *********, ******** ***** ******, ***..) and *** ** ** ** ***********. **** *** ** ********* for **** *******.

***** ****** ** **** ****.

Thumbnail picture of guitar with chris

Christopher Freeman

In reply to Brian Karas | 05/12/17 02:18pm

******** **** , *** ***** ********

Thumbnail picture of guitar with chris

Christopher Freeman

05/12/17 02:16pm

***** **** *** **** *** ********* ******, *****, *** ********* to ******** *** ******* **** * *****

**** **** ** **** ***** , ** *****, **** *********** signatures.

******** **** ***** *******'* ** ********'* *** *******.

*** ****** *****, *** ********* ***** , ** ** **** close **** *** *********** *** ***** ** *** ***** ** the ***** ********** *******

Thumbnail marty2016

Marty Calhoun

IPVMU Certified | 05/12/17 02:44pm

**** ***********, ***** *** *****!

Mitch Reitman

05/13/17 06:06am

*'* *** *********** *** * ********** ***** ****** ** *** article, *** * ****'* ***********. *****, *** ***********, *** *** quotes **** **** *** ********* ** * ************ **** * gave ** *** **** ** *** *, ****. **** * actually **** *** **** ** ********** **** * *********** ****** of *** ****** ******** ******* *** *** ** * ********, then ********* *** ****** **** *** **** **** **** ***. The ************ *** ** **** **** *** **** *** *********** to ******* ****. *** ***** ***** ** **** *** ********* are *** **** ** ******* *** **** ** *************. *** source *** **** ** * **. *** ***** **** (****** v. ************). *** ********* ** ******* ****** **-** ****** ** the ***' ********** ** ***** ** * ******* ** ***** as "*** ***** **** * ******* ***** ***** *** ** a ******* ******."

**** ***** *** ****** ******** ** ***** * ******* ***** upon **** **** ** ****** ***** *** *** *******:

************** ** ******** ****** - **** *** * ****** *******, again ***********, *** ********** ****** ** **** **** ** ********** and * ******** ** *******.

********** ****** ******** ****** - ********* ******** ** **** **** are ********** **** ** ********* * *** ******* *****.

** * ****** *** * *********** ** *** *** *** Conference **/*** *** ******** ** ****** **** *** *** ****.

****** *** **** ******** ** ********* ** ** ********** *** feel **** ** ***** ** *** ** **** **** **** any *********.

Undisclosed Integrator #2

05/13/17 01:55pm

*-** ****** ** *** **** ** *** *********** ** **-*** monthly ***. **** ***** ******** *** **** ****** **-** ******* RMR. ***** ******* *** ****** *** ** **** ** ******* manufacturer ****-- ******* * **** *** **** **** *********** ***** 15mm+ **** ****** ** **** ***** ******** **** **** **** with * ***** **** *** ******** *****.

* ******* **** * ****** ****** ***** *** ******* *********** market ** ********* ***** **** **** * ****** ** * larger ***** **** ***** ****** *****.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Importance of Sales To Integrators - Statistics on Jun 23, 2017
One of the top trends in the industry over the past few years has been the rise of across-the-board sales (e.g.: Hikvision Sales, Dahua Sale,...
45 Drives 'Lowest Cost' Enterprise Storage Company Profile on Jun 21, 2017
45 Drives claims the "lowest cost per Hard Drive Slot in the industry." But who or what is '45 Drives'? What started as a product design to...
Resolver / PPM 2000 Incident Management Platform Profile on Jun 20, 2017
You might have seen the company whose employees wear hockey jerseys at trade shows and wondered "what do they do?" PPM 2000 has been active in...
Dahua Demotes USA CEO on Jun 19, 2017
Dahua has demoted their USA CEO Tim Wang. Inside this note, we examine the move, Dahua's challenges and what lies ahead for the...
VMS UI - Light vs Dark Preferences on Jun 16, 2017
Several VMS manufacturers have the ability to choose a user interface with either a light or dark color theme. 150+ integrators told us which they...
ESX 2017 Final Show Report on Jun 16, 2017
The ESX (Electronic Security Expo) day 3 / Thursday is done and the exhibits are over. IPVM was in Nashville covering it in-depth. Below covers...
Bluebeam Revu Security Floorplan Estimation App Test on Jun 15, 2017
Bluebeam Revu is a construction design markup tool that claims it is "used by 94% of top US contractors", but what role does it have for physical...
Panasonic Sells VSaaS Company To Eagle Eye (Cameramanager) on Jun 15, 2017
While many VSaaS companies might hope for one acquisition, Cameramanager has managed to get acquired twice. First they were acquired by Panasonic,...
NLSS / ATV Partnership Examined on Jun 13, 2017
NLSS has been one of the most ambitious security / surveillance startups. After selling his last startup, Sypixx, to Cisco, Pete...
Non-Competes Divide Integrators on Jun 12, 2017
Non-competes are controversial legal agreements that prohibit parties (typically employees) from working in a similar role or trade of their...

Most Recent Industry Reports

Importance of Sales To Integrators - Statistics on Jun 23, 2017
One of the top trends in the industry over the past few years has been the rise of across-the-board sales (e.g.: Hikvision Sales, Dahua Sale,...
Deep Learning Surveillance Startups Deep Problem on Jun 23, 2017
The undeniably good news for the video surveillance market is that we are seeing the rise of more startups than in many years. The cause of this...
Avigilon Announces RADAR-Based Presence Detector on Jun 22, 2017
RADAR is gaining momentum within physical security. Two months after Axis announced a network radar detector, Avigilon has announced a RADAR-Based...
Covert Cloud Camera Service Launching (KJB) on Jun 22, 2017
Cloud IP cameras, for consumers, has become increasingly commonplace. However, covert cameras, lag there, with few options. Now, North America's...
Manufacturers Shipping Unlicensed H.265 Products on Jun 22, 2017
While H.265 support in video surveillance is growing, IPVM's research shows that most surveillance manufacturers are shipping H.265 products with...
Uniview Low-Cost Bullet PTZ Tested on Jun 21, 2017
Uniview is offering a HD zoom bullet camera, the IPC742SR9-PZ30-32G, with an integrated pan / tilt positioner, for the price of a low-cost...
QSR Video Surveillance Best Practices on Jun 21, 2017
Fast food restaurants or QSRs (quick service restaurants), are frequent victims of crime and fraud. Because they are open late, deal with cash, and...
45 Drives 'Lowest Cost' Enterprise Storage Company Profile on Jun 21, 2017
45 Drives claims the "lowest cost per Hard Drive Slot in the industry." But who or what is '45 Drives'? What started as a product design to...
No Hack, Still Liable, Court Finds ADT on Jun 20, 2017
Recently, ADT has been in the news for a $16 million settlement for a cyber security vulnerability class action suit. One of the most important...
Resolver / PPM 2000 Incident Management Platform Profile on Jun 20, 2017
You might have seen the company whose employees wear hockey jerseys at trade shows and wondered "what do they do?" PPM 2000 has been active in...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact