Recurring Monitoring Revenue: The Multiplier Buyers Pay For

If there is one number that moves the price of a security business more than any other, it is recurring monitoring revenue. Buyers in the electronic security market are, more than anything, buying predictable, contracted income, and a book of monitored accounts is the cleanest form of it. This article explains why monitoring income commands a premium, and how it is valued.

What Recurring Monitoring Revenue Is

Recurring monitoring revenue, often shortened to RMR, is the contracted monthly income a business earns from monitoring alarms, CCTV and connected systems, usually through an alarm receiving centre, along with associated maintenance and managed services. The defining feature is that it arrives every month without new selling. Unlike a project install, which has to be won and delivered again and again, a monitored account keeps paying for as long as the customer stays.

Why Buyers Pay a Premium for It

Predictability is worth money. A buyer can model contracted monitoring income forward with far more confidence than project revenue, which makes the earnings more defensible and the business easier to finance. That is why recurring monitoring income is the single biggest value driver in electronic security, and why a business with a strong monitored book is treated very differently from one that relies on one-off installs.

It also changes how the business is valued. Monitoring and alarm receiving centre books are frequently valued not on a multiple of EBITDA but on a multiple of recurring monthly revenue, typically in the region of 30x to 45x RMR, with the exact figure depending on customer attrition and gross margin (DealFlowAgent, 2026). A low-attrition, high-margin book sits at the top of that range; a book with heavy churn sits at the bottom.

How a Monitored Book Sits Within Overall Value

For an integrated electronic security business, the recurring book is the part buyers prize most, but it sits alongside install and maintenance income. Integrated electronic security businesses commonly transact at 6x to 10x EBITDA overall, with scaled, recurring-revenue platforms higher still (DealFlowAgent, 2026). The larger and stickier the recurring element, the closer to the top of that range a business tends to get, because the recurring income is what underwrites the multiple.

What Buyers Examine in the Book

Buyers look past the headline RMR figure to its quality. They examine attrition, the rate at which accounts are lost each year, because a high churn rate erodes the value of the book quickly. They look at contract length and renewal terms, the spread of accounts across customers and sectors, and the margin on each account after the cost of monitoring. A diverse, low-attrition, well-documented book is worth materially more per pound of revenue than a concentrated, churning one.

They also check how the alarms actually signal. Many monitored systems still communicate over the old analogue telephone network, and that network is being switched off on 31 January 2027 (Openreach, 2025). Accounts that have not migrated to IP or dual-path signalling will need upgrading, and a buyer will treat that as work to be done and price it in. A book already moved to modern signalling, ideally compliant with EN 50136 transmission and monitored from an EN 50518 centre, is a cleaner asset. There is a flip side worth noting: for the business, the switch-off is also an opportunity, because every legacy account that must migrate is a reason to renew and extend the contract.

Building Monitoring Revenue Before a Sale

If you have a year or two before you intend to sell, growing and tidying the recurring book is one of the most effective things you can do for your eventual number. Converting one-off install customers onto maintenance and monitoring contracts, reducing attrition, documenting each account cleanly, and migrating legacy signalling all lift the quality of the book and, with it, the multiple. Because RMR is valued so highly, improvements here tend to repay the effort more than almost anything else.

Even if a sale is closer than that, it is worth presenting the recurring revenue clearly and separately so a buyer can see it for what it is. Merging it into a single turnover figure hides the very thing that justifies a premium. Part of a well-run process is making the recurring book visible and easy to verify.

An Active Market for Recurring Books

Demand for recurring monitoring income is strong. Private equity is consolidating the sector, with 70% of UK fire and security deals in 2025 backed by private equity, up from 57% the year before (Grant Thornton, 2025), and buy-and-build platforms are particularly keen on businesses with predictable recurring revenue. Among the 8 to 10 vetted buyers we would introduce to a typical business, several are specifically seeking monitored books. The buyer pays our fee, not you.

The right number for your business depends on the size, quality and stickiness of your recurring revenue, and the only way to get a figure that reflects it is a conversation. It takes around thirty minutes and is free.