The 2026 Security Exit Window: Deadlines, Deals and the Diligence Bar

Most security business owners keep half an eye on the market and the other eye on the operation, and the operation usually wins. That is understandable. But every so often several things move at once, and the second half of 2026 is one of those moments. Four separate forces, none of them dramatic on its own, are lining up in a way that changes what buyers will pay and how a seller should prepare.

This briefing works through each of the four: the copper switch-off that has become a fixed deadline in buyers' diligence, their detailed checks before they commit, the Martyn's Law provisions that came into force in June, the investor-backed groups buying firm after firm across the sector to build larger ones, and the tax changes that took effect in April. Everything here draws on published sources and current market activity; where a figure appears, it comes from the body that produced it.

The Countdown That Became a Pass or Fail Test

The analogue telephone network that has carried alarm signals for decades is being retired, and the date is now fixed. Openreach has confirmed January 2027 as the deadline for switching off the analogue PSTN network. Legacy intruder alarms, fire systems and CCTV still signalling over copper lines need upgrading before then.

What is new this year is the cost of standing still. Openreach has confirmed staged wholesale price rises on legacy line rental through 2026: 20 per cent from April, a further 40 per cent from July, and a final 40 per cent from October, which roughly doubles the cost of a legacy line against 2025 rates. By late September 2026 Openreach put the lines still on the old network at around 1.2 million, including around 350,000 business premises.

For an owner, the reason this has moved up the agenda is what it does in due diligence. Recurring monitoring revenue is the single most valuable element of an electronic security business, and monitoring and alarm receiving centre books are frequently valued on a multiple of monthly recurring revenue, that is, the monthly figure multiplied by a set number, rather than on profit alone. A book of accounts still signalling over copper sits inside that recurring income as a liability: potential customer loss, and the cost of a rushed migration close to the deadline.

Buyers now open with it. They want to know what proportion of the monitored base is already on IP or cellular signalling, ideally dual path, what remains on legacy lines, and whether there is a credible schedule and the engineering capacity to finish in time. A base that has been migrated, or is part way through with a clear plan, reads as clean recurring revenue. One that has been left untouched reads as a re-signalling bill the buyer will price into the offer.

A migrated monitoring book is not just compliant. It is the cleanest evidence a buyer has that your recurring revenue is real and will still be there after completion.

The constructive way to see the switch-off is as a reason to upgrade rather than a threat. Moving an account from a copper line to a modern signalling device turns a one-off compliance task into an upgraded, often higher-value, recurring signalling contract. Owners who get ahead of it protect their recurring revenue and present a more defensible valuation; those who do not hand the buyer a discount they did not need to give away.

Regulation Takes Another Step: What Changed in June

The second force is regulation writing demand, and it took a concrete step this summer. Commencement regulations made in June 2026 brought further parts of the Terrorism (Protection of Premises) Act 2025, known as Martyn's Law, into force from June 2026. They cover the Security Industry Authority's duty, as the appointed regulator, to produce, publish and review its guidance, another step from legislation on paper towards an operating framework.

The duties on premises operators themselves are not immediate. The Act carries an implementation period of at least 24 months from Royal Assent in April 2025, so those obligations apply from around spring 2027. In the meantime the Security Industry Authority consulted on its draft section 12 statutory guidance, setting out how it will exercise its regulatory functions; that consultation closed in June 2026, with the final guidance and a consultation report expected in autumn 2026.

The scale is worth stating plainly, because it is the demand signal. The Home Office impact assessment puts around 179,000 premises in scope: roughly 155,000 at the standard tier, which applies from 200 or more individuals present, and around 24,000 at the enhanced tier, from 800 or more, a figure that includes 975 music festivals.

For a security business owner, the point is not the headline. It is that a large population of premises operators now has a statutory reason to review physical security, monitoring and staffing over the next two years, and that demand is written into legislation rather than dependent on the economic cycle. Buyers value recurring, compliance-driven revenue precisely because it is durable, and a maturing regulatory regime is one of the clearest ways a sector demonstrates that its demand will still be there in five years.

Who Is Buying: The Consolidators' 2026 Run

Ask most owners who might one day buy their business and they name a local competitor or two. The real buyer list in 2026 is longer, better funded and busier than that, and this year it has a clear paper trail.

Ranger Fire and Security, a private-equity-backed buy-and-build group, which grows by adding smaller firms to one larger business, opened 2026 by acquiring Partnership Fire and Security in Dorset in January, its first deal of the year and its fourteenth since launching in February 2024. It added Centurion Fire and Security in Huddersfield in February, its fifteenth, and in late June announced a double deal, Scion Communications in the south of England and Emerald Fire Technology in Cork, following investment from Inflexion. Elsewhere, Complii added Nottingham-based Tay Fire and Security in December 2025, its twentieth acquisition.

These are not isolated moves. In 2025, 70 per cent of UK fire and security deals involved private-equity-backed corporates, meaning companies owned by investment firms that buy companies to grow and sell on, up from 57 per cent the year before, and one market count, which gives no split by country and takes its examples from the US, recorded 242 security transactions across the year, an increase of around 24 per cent. The clear pattern in the current flow is that systems and fire-and-security platforms dominate, while manned guarding trades more thinly and more slowly.

That split is the first valuation question in the sector, and it is why a mixed business is priced line by line rather than on a single blanket multiple. Published practitioner guidance puts integrated electronic security businesses at 6x to 10x EBITDA (profit before interest, tax, and the write-down of equipment, vehicles and other assets), and scaled platforms with high recurring revenue at 10x to 15x or more. It gives no range for manned guarding. Monitoring books, as noted, are often valued on a multiple of monthly recurring revenue instead.

Buyers separate the guarding book from the monitoring book before they price anything. Owners of mixed businesses should do the same, because that is the number the offer is built on.

Understanding what these buyers screen for tells you what to strengthen before a sale. A buyer adding a smaller firm to a group it already runs wants a monitored contract book with strong renewal history, current accreditation, a BS 7858-vetted and SIA-licensed team that keeps its existing terms through the sale, either staying with the company or moving across under TUPE, as officers do when a guarding contract changes hands, and coverage that fills a gap on their map. Accreditation matters here more than in most trades: NSI Gold, SSAIB and Approved Contractor Scheme status do not win the premium on their own, but their absence removes a business from the shortlist, because they underpin tender eligibility and insurance and let a buyer keep contracts on transfer day.

The convergence between fire and security is quietly widening the buyer pool as well. The largest recent example sits at the top of the market: Mitie completed its acquisition of Marlowe in August 2025 in a deal reported at around 350 million pounds, described in one market note as close to 11 times Marlowe's adjusted earnings. That multiple applies to a listed compliance platform and is no guide to what an owner-managed firm would fetch, but the direction it signals matters: testing, inspection and certification groups are adding electronic security to widen recurring compliance revenue per client, which means more types of buyer for a well-run systems business than most owners assume.

The Tax Reset: BADR at 18% and a New Inheritance Cap

April 2026 rewrote two of the tax rules that matter most to business owners, and both reward doing the arithmetic early rather than late.

Under Business Asset Disposal Relief, the relief for owners selling a trading business they work in, the tax rate is now 18 per cent. The staircase is complete: 10 per cent before April 2025, 14 per cent for the 2025-26 tax year, and 18 per cent from April 2026. The relief still applies to the first 1 million pounds of qualifying lifetime gains, with the excess taxed at the main 24 per cent rate, and the rate is normally fixed by the day the sale contract becomes binding with no conditions left, often completion day, not the day you shake hands. The rise has already happened, so the countdown framing of last spring is finished; what remains is a quieter calculation. At 18 per cent, the relief is still worth up to 60,000 pounds on a full 1 million pound gain, and the gap to the main rate is the narrowest it has been. Whether that gap narrows further is a matter for future Budgets, and the direction of travel since 2024 has gone one way.

The second change is less discussed and, for owners of larger businesses, arguably more significant. From April 2026, 100 per cent Business Property Relief from inheritance tax applies only to the first 2.5 million pounds of combined business and agricultural assets. Above that, relief halves to 50 per cent, an effective rate of up to 20 per cent on the excess. The cap was originally announced at 1 million pounds and raised to 2.5 million in December 2025; it is transferable between spouses and civil partners, so a couple can shelter up to 5 million pounds, and HMRC estimates up to 1,100 estates will pay more in 2026 to 2027.

Here is why that reaches an exit decision, the choice of how and when you sell and step back. For years, one rational plan was to hold the business for life and pass it on free of inheritance tax. For estates above the new cap, that plan now has a price attached, and an owner whose business is worth several million faces a different estate position than before April. None of this is tax advice, and the right answer depends entirely on your circumstances; the point is that the question is worth an hour with your accountant this year, not eventually.

What the Four Forces Mean for Your Timing

Set the four side by side and the shape of the moment is clear. A locked switch-off has turned the state of a monitoring book into a diligence pass or fail. A maturing regulatory regime is writing durable demand into a large population of premises. Investor-backed groups that buy up smaller firms are buying steadily, and recurring monitoring income is what they pay most for. And the tax environment, while less generous than it was, is settled and still favourable against the main rates, with a new inheritance cap giving larger owners a fresh reason to review their plans.

None of this says you should sell now. It says you should know what your business is worth now, because the conditions that set that number are unusually well defined, and because every sensible exit decision starts from an honest baseline rather than a guess. Whether you act this year or in three, the preparation is the same: migrate the signalling base, document the accreditation and vetting records, reduce the business's dependence on you, and understand your tax position while the rules are fresh.

None of it commits you to anything. It simply tells you what your options look like, and options are the one thing you cannot create in a hurry once a buyer is at the table.

Before a sale you will need an accountant or tax adviser and a corporate solicitor, and it helps to know when to bring each one in.