You can read all of our articles on our website. Having trouble getting our emails?   Change your spam controls and white list 

More comment on ADT – Google deal / cs webinars 
August 11, 2020
Register for Central Station 2020 Webinars below
More comment on ADT – Google deal from August 8 and 10, 2020
            Regarding your comments on August 8, 2020 about Google’s investment in ADT.  You indicate that the investment translates to a multiple of 19.5X RMR.  Business valuation can be complicated.  There are a lot of factors that go into the valuation of a business.  I perform valuations of Security, Fire, and Systems Integration companies for divorces, partner disputes, tax matters, probate issues, and for damage computations in litigation.  I do 25 – 30 a year and the results are very seldom consistent.  True, most company’s main asset is their RMR, and RMR trades at multiples of gross billing, but not all RMR is equal.  For example, the RMR a 40 year old fire protection company with 4,000 customers in a compact geographical area would typically sell for a higher multiple than the RMR of a mass market burg company, spread across several states.  When valuing any business, cash flow is king, but there can be other factors.  When Tyco sold Sonitrol to an equity group we did the valuation for their Balance Sheet.  This was more than a sale of RMR, there were factors such as in place workforce, a franchise network, trademark, real estate, and goodwill.   I frequently value the interest of an investor or family member in a dispute.  These values are affected by lack of control and lack of marketability.  All valuations are influenced by future cash flow.  Buyers are paying for future cash flows.  A company with 7% attrition would be expected to generate more future cash flows than one with 20% attrition. 
            There are numerous factors involved in the purchase of an interest in ADT by Google.  One huge factor is that Google didn’t buy ADT, it obtained a 6.6% stake.  Although this stake does give Google significant influence, and creates a working interest between the two companies, Google is a long way from owning ADT.  The analysts at Google aren’t dumb.  This can’t be compared to an RMR buy in which the Buyer is purchasing cash flow from an alarm company with the goal of eliminating overhead and increasing future cash flows.  I expect that Google will use the ADT brand as a platform to offer additional services in the security, and connected home, space.  Some ideas will be successful, some will not, the best that we can do is to watch and take notes.   
            The only thing that I gather from this transaction is that a marketing and technological giant has entered the marketplace by investing in a major player.  This doesn’t make an independent company worth less than 20X.  The sky is not falling.  If any company owners disagree please call me.  I have plenty of very successful clients ready to buy your company for much more than 19.5X. 
 Mitch Reitman
 Reitman Consulting Group
    Google's investment in ADT is another step towards a fundamental change in the security industry.  The first step towards this new landscape was the wide spread acceptance in primarily the residential market segment of "Monitor it Yourself" systems.  While at this point largely accepted by  Gen X and Millennial, the up and coming Generation Z will be even more accepting of this technology, that in many ways takes us back to the days of tape dialers, incurring most of the same drawbacks.
    The next market segment to attack are the monitored systems.  How do you lower the costs of "Professional" monitoring to the point that the recurring monthly price is insignificant for the end user but still a profit center for the central station?  Software providing full end to end automation.  Most of up to date central stations have already started using automation for notification of supervisory and non-essential signals.  They are implementing apps to allow users to verify and cancel alarms without the need for a human phone call. Subscribers like these features and see them as the mark of sophistication rather than cost savings.  
    Slowly being implemented is ASAP to PSAP, this service allows a central station to transfer information about an alarm to the local PSAP automatically without a phone call.  Instantaneous transmission without transcription errors, or the need for an alarm agent to handle the call.
    Each step in towards full automation has one primary goal.  Monitoring companies rates are largely determined by activity load, how may systems per operator can the center monitor and provide acceptable performance?  If one center operates at 1 operator per 5000 accounts and another at a 1 to 25000, the second should be more profitable.  If the service level perceived as the same or better then full automation has won.
    Now take companies that have the ability to create and control software, products, services, and have brand recognition that in some cases seems to be more of a cult following.  What if though AI they only need 1 operator for every 100,000 accounts?  How low could their monitoring fees go?
    What could they create for a mass market when all the systems talk seamlessly together from end to end.  What systems could they leverage that the average alarm company or central station does not have access to?  Example what if they came up with a detector that detected an unknown cell phone in a closed premise?  The detector captures the IMEI of the device, gets location information from the device,  communicate the information to the automation station and using mapping services the device could be tracked.  Providing authorities with information on the break in and where to fund the perpetrator.  Do you think they could mount an effective advertising campaign?
    Look for trends and opportunities, don't become complacent, show your subscribers what makes your company valuable; communicate!
Mark Fisher
            RE:  Google investment in ADT
            Maybe easier to break down the meaningless legislative barriers-to-entry, from inside ADT?
Lee Jones
Support Services Group
Register Now for the CS webinar series: 
Electronix Systems C.S.A:  August 18, 2020  12 PM ET
Emergency 24:   August 19, 2020 12 PM ET
Central station webinars
            Not all central stations on The Alarm Exchange have opted to participate as of yet.  You still have time.  Contact our Concierge Coordinator Stacy Spector, Esq at or 516 747 6700 x 304.  You just might pick up one or more dealers.
            And, speaking of dealers, selecting the right central station is important; there’s lots to consider.  K&K is saving you the trip to Vegas and bouncing from one booth to another, stuffing your pockets with candy and pens [not that there is anything wrong with that].  You have and you will be hearing from the best of the best in this webinar series.  
            Keep in mind that any legitimate central station is going to require you to sign a Dealer Agreement.  This isn’t a car rental contract at the airport.  It can be modified and you need to ask for those modifications.  I’ve designed a Rider that applies to every central station Dealer Agreement because it includes all the provisions a dealer should be asking for and is entitled to.  If you are negotiating with a new central station or re-negotiating with your current central station, be sure to get the Rider.  It’s $500 and well worth it.  Order it at in the Monitoring Centers Contracts category.
Central Station* 2020 webinar series K&K is hosting webinars by central stations, one at a time, who will address "why you should be using our central station".  Each webinar will be approximately 20 minutes and then Q&A opportunity.  See what your central station has to offer or what others offer, enabling you to choose the right central station for you.  You should be using a central station listed on The Alarm Exchange to be assured of quality and more importantly, accountability.
  *  only central stations on The Alarm Exchange will be invited to participate

To order up to date Standard Form Alarm /  Security / Fire and related Agreementsclick 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