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)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

*-** ****** ** *** **** ** *** *********** ** **-*** 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

Panasonic Unified Surveillance Strategy Analyzed on Nov 17, 2017
Panasonic is now a "Unified Surveillance" offering, as their ASIS 2017 booth proclaimed: Looking to make a comeback in the security industry,...
Axis Commits To Long-Term Firmware Support on Nov 15, 2017
With the rise of cyber security awareness, and a general increase in hardware reliability, "software warranties" may prove more valuable than...
Dahua Launches Electric Cars on Nov 13, 2017
Embattled mega video surveillance manufacturer Dahua is now electric car manufacturer Dahua. Let the jokes begin: But is the joke on Dahua's...
Top 2017 Trends - Cyber and Analytics on Nov 09, 2017
The 2 clear top 2017 trends, according to IPVM integrator statistics are: Cyber Security Video Analytics This is a change from 2016...
Average IP Camera Cable Run Distance on Nov 07, 2017
Estimating cable lengths can be tricky, seemingly either all guess work or requiring each and every run to be measured, a time consuming task.  To...
ZoneMinder Open Source Profile on Nov 06, 2017
The first, oldest and probably the best known open source VMS is ZoneMinder. But where has it gone and is it still relevant today in a world of...
Top Manufacturers Gaining and Losing 2017 on Nov 03, 2017
3 years ago, IPVM statistics accurately and early identified the rise of Hikvision usage across Western markets (see Top Manufacturers Gaining and...
Avigilon Access Control 2017 Examined on Nov 01, 2017
For more than 4 years, Avigilon has been in the access control business, since their May 2013 acquisition of RedCloud. Since then, Avigilon has...
Integrators Know Admin Passwords For Nearly All End-User Systems (Statistics) on Nov 01, 2017
With cybersecurity concerns rising, more scrutiny is being applied to various elements of security implementation. One of those is who knows the...
The Milestone Personal Demo Marketing Campaign on Oct 30, 2017
Waste of money or emarketing innovation? In a program being heavily promoted on their social media channels Milestone is offering to...

Most Recent Industry Reports

Panasonic Unified Surveillance Strategy Analyzed on Nov 17, 2017
Panasonic is now a "Unified Surveillance" offering, as their ASIS 2017 booth proclaimed: Looking to make a comeback in the security industry,...
Amazon Cloud Cam Is Poor (Tested) on Nov 17, 2017
Retail behemoth Amazon has entered the surveillance market with the Amazon Cloud Cam, the eyes of its just-announced Amazon Key delivery...
Nest Secure Alarm System Tested on Nov 16, 2017
Google's expansion continues, this time into home security with their Nest subsidiary's move into alarm systems. They paid more than a...
Dahua Forbes 'Next Web Crisis' Vulnerability Dispute on Nov 16, 2017
The buffer overflow vulnerability in Dahua products is not in dispute, in fact we covered it when it was first published. What is in dispute is...
Isonas Cofounders Split, Launch Partner/Competitor on Nov 16, 2017
Breaking up is hard to do, especially when door access security is at stake. But that is exactly what has happened at Isonas. Senior employees...
Hikvision China Criticizes The WSJ on Nov 15, 2017
Hikvision, through the Chinese government's authoritative news service, has criticized the WSJ investigation into Hikvision. In this...
PoE UPS Tested (Energy Reconnect) on Nov 15, 2017
In security, backup power is important, but most often requires UPS systems or extra cabling to devices for low voltage power. Now, some have...
Axis Commits To Long-Term Firmware Support on Nov 15, 2017
With the rise of cyber security awareness, and a general increase in hardware reliability, "software warranties" may prove more valuable than...
Hikvision NVR 4.0 Improvements Tested on Nov 14, 2017
Hikvision has released firmware version 4.0 for select NVRs, touting two years of research and development, and claiming "the new generation GUI...
Vivotek Remote Stack Overflow Vulnerability on Nov 14, 2017
A stack overflow vulnerability in Vivotek cameras has been discovered by bashis, the security researcher who has also found vulnerabilities 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