You can read all of our articles on our website. Having trouble getting our emails?   Change your spam controls and white list 
Comments on what’s the current multiple
January 21, 2020
Comments on what’s the current multiple from January 15, 2020
            I agree with your article on valuation. I recently closed half a dozen deals with my clients that were using your agreements. The  Kirschenbaum contract transactions fetch greater value, better buyers and top dollar putting more in the pockets of our clients.
Rory Russell 
Acquisition and Funding Services 
cell 518-366-5111
            We sold our company several years ago and got a very good multiple and lots of offers.  However, I have two comments regarding the answer to your question.
            First we were using your contracts and have been very strict about getting signed contracts.  Did we have 100% on new contracts no, but very few and none we couldn't get updated.  You are absolutely right, but having good contracts also reflects on the quality of the customers and the quality of the company, so generally good companies get better multiples and having good contracts is a characteristic of good companies.
            The second matter is maybe a little off subject, but that is, how much cash will I end up with?  That's more important than the multiple.  Taxes, sale expenses, and deductions will determine what you get.  You can't spend the multiple; you can only spend the net after taxes and expenses.  In our case we had far more off balance sheet liabilities than we realized because we had never invested in CPA Audits.  I expect that if we had spent a few thousand dollars on a couple of full audits we would have found that we had other things we needed to clean up in order to maximize the final net cash we would ultimately receive.
            I guess there is one other item in selling and that is the relationship you build with the buyer.  Do you want to walk away at sale or do you want to protect your employees, your clients, and possibly your future employment?  That is just as important as the price you get.
  Wayne Boggs
            I think that you are missing a key factor, availability of funds to the industry.
            There are some significant companies that were buyers that can’t get bank approvals to buy anything, no matter their own cash flow, because of the oversight of the lender.
            So there are no mega deals at 40X plus unless the buyer has stellar finances, great cash flow, low debt and great management.
Bart Didden
            All good points, and Rory, thanks for the confirmation that the Kirschenbaum Contacts bring the highest prices and make for the easiest deals.
            Having knowledgeable tax advice is definitely something you need when selling.  What you end up with is all it’s about.  While you’re at it, you may want to consider what you’re going to be able to do with your sale proceeds.  If you’re counting on investment income you better find out in advance what you can expect to generate.   
            But great contracts are just one factor used to arrive at a multiple, as Wayne points out.  Companies that have great contracts and use them properly are more likely to do everything else correctly.  Companies that neglect their contracts are more likely to ignore other best practices and can expect to receive multiple offers well below 35 times.
            Bart is also correct that bank financing may be more difficult to get.  That may affect the large to very large deals, $100K to hundreds of thousands, if not millions, in RMR. The large deals have little bearing on the typical alarm company selling to another typical alarm company.  Most deals don’t need bank financing; at least financing that relies on the alarm business.  That may be a good thing.  I am not so sure that lending institutions are in the best position to evaluate the risk in financing an alarm deal, but I’ll leave that for another day.
            I’ll end today with this:  Worry less about what your multiple might be, and concern yourself with running your alarm company using the best practices; your multiple will be as high as it can be if you run the company using all precautions and best practices.

To order up to date Standard Form Alarm /  Security / Fire and related Agreements, click here:
You can check out the program and sign up here: or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
NOTICE:  You can always read our Articles on our website at
THE ALARM EXCHANGEalarm classifieds alarm security contracts

    This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc. 
    There is no charge to post a listing here.Include your contact information, phone, email and web site.  If you would like to submit a post, please send an email to  To create a reciprocal link to our website, click here.

Getting on our Email List / Email Articles archived: 
    Many of you are forwarding these emails to friends or asking that others be added to the list.  Sign up for our daily newsletter here: Sign Up.  You can read articles and order alarm contracts on our web site
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301