What should I check before buying an alarm monitoring company?

An alarm company is mostly a book of subscribers plus the people who install and service the equipment. A buyer is paying for the stream of accounts, so the first job is to find out whether that stream is real, whether it will survive the change of owner, and who is needed to keep it running. These checks follow that order.

Match accounts to money

Ask for the subscriber list and test it against bank deposits and billing records, account by account for a sample. Ask how accounts are paid: by pre-authorized payment, by card or by invoice. Look for accounts that are listed but not paying, and payments that arrive with no matching account. Have your accountant do this work, because it is where mistakes show up.

Cancellations and their reasons

A list of current accounts says little about how well they are kept. Ask for the cancellation history and the stated reasons. Customers who move away are one thing; customers who leave because of poor service or a competitor’s offer are another. Ask whether cancellations rose around any event, such as a price change, a staffing gap or a move to new equipment.

Equipment and contracts

Find out who owns the panels, cameras and sensors at each site: the customer, the company or a finance firm. Read the customer agreements to see whether they can be assigned to a new owner or need each customer’s consent. Read the central-station agreement too, if a third party monitors the signals, and ask what it says about a change of owner. Your lawyer should read both sets.

People who keep it running

Technicians and installers carry the customer relationships in the field. Ask who they are, how long they have stayed and which of them hold the training the work needs. Ask what happens on a busy week or when one of them leaves. If the owner is the main installer, ask how that gap would be covered.

The BDC due diligence guide lists the wider checks, and selling an alarm monitoring company shows what a seller expects to be asked. The broader security services checklist covers guarding.