Why are private equity firms buying security businesses?

Fire and security is one of the most active areas of private-equity-backed consolidation in the UK. In Grant Thornton's 2025 review, 70% of UK fire and security deals involved private equity or PE-backed corporates, up from 57% in 2024, the highest concentration of any facilities-services subsector. Buy-and-build platforms are rolling up owner-managed businesses, paying a premium for recurring monitoring revenue, accreditation, and a vetted, retained workforce.

How does recurring monitoring revenue affect a security business valuation?

Recurring monitoring revenue is the single most important value driver in electronic security. Monitoring and Alarm Receiving Centre books are frequently valued on a multiple of monthly recurring revenue rather than EBITDA, typically 30x to 45x, because the income is contracted and predictable and arrives without new selling. A business with a strong book of monitored or ARC-connected accounts attracts higher multiples than a labour-heavy guarding operation. Source: DealFlowAgent, 2026.

What is BADR and how does it affect the timing of my sale?

Business Asset Disposal Relief (BADR) provides a reduced Capital Gains Tax rate on qualifying business disposals up to £1 million. The rate rose from 14% to 18% on 6 April 2026. On a £500,000 gain, that is an additional £20,000 in tax. Anti-forestalling rules mean signing before the deadline does not lock in the older rate if completion follows. Timing matters, but it should not be the only reason to sell.

Is now a good time to sell a security business?

For well-prepared owners, the conditions are unusually favourable. Private equity is consolidating the sector aggressively, Martyn's Law and the PSTN switch-off are structural demand drivers, and the BADR change has sharpened the timing decision. More buyers competing for accredited, recurring-revenue businesses means stronger valuations for sellers who have prepared.

Security M&A Market Briefing | Sell Your Security Business

Q: What are security businesses selling for in 2026?

It depends on the revenue mix. Manned guarding businesses typically sell for around 3x to 8x adjusted EBITDA, with most well-run firms in the 3.5x to 6.5x range, reflecting thin, labour-dependent margins. Integrated electronic security businesses command more, commonly 6x to 10x EBITDA, while monitoring and Alarm Receiving Centre books are often valued on a multiple of monthly recurring revenue, typically 30x to 45x. Recurring monitoring revenue, NSI Gold or SSAIB accreditation and BS 7858 vetting all push valuations towards the upper end. Figures are practitioner guidance from DealFlowAgent, 2026, not guaranteed values.

THE MARKET

A large, fragmented market that buyers are consolidating.

The UK private security guarding market is worth around £9bn a year and is served by roughly 6,460 businesses, with national operators such as Mitie Security, G4S and OCS sitting above a long tail of owner-managed firms. Alongside it, the electronic security systems market, covering intruder alarms, CCTV, access control and monitoring, adds a further £2.1bn or so. That second market is the higher-margin, recurring-revenue end of the sector. Source: IBISWorld, Private Security Services and Security System Services in the UK, 2025 to 2026. Order-of-magnitude estimates.

The regulated workforce is large and still growing. More than 500,000 active Security Industry Authority (SIA) licences are in issue, held by around 459,000 individuals, weighted heavily towards door supervision and contract guarding rather than electronic systems. A licensed, vetted and retained workforce is part of what a buyer pays for, because it cannot be assembled quickly. Source: GOV.UK, SIA Licence Holders statistical data set, 2025.

A market this fragmented, with this much recurring and regulated revenue, is exactly the kind of sector that consolidators target. For an owner thinking about an exit, that means an unusually active field of buyers.

CCTV cameras monitoring a commercial site, representing the UK electronic security systems market

CONSOLIDATION

Private equity is consolidating UK security.

Fire and security has become one of the most active areas of private-equity-backed consolidation. In Grant Thornton's 2025 review, 70% of UK fire and security transactions involved private equity or PE-backed corporates, up from 57% the year before, the highest concentration of any facilities-services subsector. Named buy-and-build platforms include New Path Fire & Security and ABCA Systems. Source: Grant Thornton, UK Fire and Security Sector M&A Review 2025.

Deal volumes reflect the same pressure. Across the wider security solutions market, 2025 saw 242 transactions, up around 24% on the year, with private equity accounting for close to half of all activity. Within that, the uniformed guarding segment recorded a sharp year-on-year jump in deal volume, partly driven by public bodies turning to private guarding amid police staffing pressures. Source: Capstone Partners via Security Info Watch, 2025. Blended UK and US activity; read the UK figure as directional.

These platforms are not buying at random. They target businesses with:

Recurring monitoring revenue and a book of monitored or ARC-connected accounts
SIA Approved Contractor status, NSI Gold or SSAIB certification
BS 7858-compliant staff vetting and clean, TUPE-transferable contracts
Geographic density and a diverse, low-concentration client base
Professional management that reduces dependence on the owner

For independent owners, this means more buyers competing for your business, which tends to drive valuations up. Periods of peak consolidation do not last forever, and businesses that are well positioned now are attracting the strongest interest.

Dome CCTV camera on a building exterior, representing monitored electronic security

BY THE NUMBERS

What buyers actually pay: a worked example.

What a security business sells for depends heavily on its revenue mix. Manned guarding operations typically transact at roughly 3x to 8x EBITDA, with most well-run firms in the 3.5x to 6.5x range, reflecting thin margins and labour-dependent earnings. Integrated electronic security businesses command more, commonly 6x to 10x EBITDA, and scaled, recurring-revenue platforms more again. Monitoring and Alarm Receiving Centre books are often valued on a multiple of recurring monthly revenue instead, typically 30x to 45x. As one published market reference point, Mitie's 2023 purchase of an electronic security systems business was priced at close to 8x EBITDA. Source: DealFlowAgent, Security Systems Valuation Multiples, April 2026; Business Sale Report, May 2023. Practitioner guidance and one reported transaction, not guaranteed values.

The example below illustrates the method for a smaller, accredited electronic security business. Reliable multiples are not separately published for sub-£1m-EBITDA security businesses, so the range shown uses a general SME proxy of 3x to 5x EBITDA, applied conservatively. It is a method, not a promise.

Example Security Business Profile

Annual turnover £500,000

Adjusted EBITDA £100,000

Recurring monitoring revenue 65%

SIA-licensed operatives 8

IP / dual-path signalling Migrated

NSI Gold accredited Yes

BS 7858 vetting Yes

Owner dependency Low

Illustrative range (4x to 5x EBITDA, SME proxy) £400,000 - £500,000

What pushes towards the top of the range: a high proportion of recurring monitoring revenue, NSI Gold or SSAIB accreditation, BS 7858-compliant vetting, accounts already migrated to IP or dual-path signalling, and low owner dependency so the business runs without the seller.

What pulls it down: labour-heavy manned guarding on thin margins, heavy reliance on a single large contract, accounts still signalling over the analogue network, or a business that cannot function without the owner on the alarm line.

Every business is different. This example illustrates the methodology, not a guaranteed figure. Your valuation depends on your specific circumstances.

TAX PLANNING

The BADR deadline: why timing matters.

Business Asset Disposal Relief (BADR) provides a reduced Capital Gains Tax rate on qualifying business disposals up to £1 million. The rate has been increasing in stages, and from 6 April 2026 it rises to 18%.

	Before 30 Oct 2024	30 Oct 2024 to 5 Apr 2025	6 Apr 2025 to 5 Apr 2026	From 6 Apr 2026
BADR Rate	10%	10%	14%	18%
Tax on £500K gain	£50,000	£50,000	£70,000	£90,000
Tax on £1M gain	£100,000	£100,000	£140,000	£180,000

These are simplified illustrations. Capital Gains Tax calculations depend on your personal circumstances. Always take advice from your accountant.

The rate change is legislation, not speculation. For a £500,000 gain, the difference between 14% and 18% is £20,000; for a £1 million gain, it is £40,000. Anti-forestalling rules mean signing before the deadline does not lock in the older rate if completion follows, so for a security business owner already weighing an exit, it pays to understand the timeline early. Source: Brodies LLP and HMRC Capital Gains Manual, 2026. Take advice specific to your circumstances.

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Market Context

EBITDA Multiples: 3x to 8x guarding, 6x to 10x electronic security

Manned guarding sits at the lower end on thin, labour-dependent margins. Integrated electronic security and recurring-revenue platforms command materially more. Source: DealFlowAgent, 2026. Practitioner guidance.

Recurring Monitoring Revenue: 30x to 45x monthly RMR

Monitoring and Alarm Receiving Centre books are often valued on a multiple of monthly recurring revenue. Contracted, predictable income is the single biggest value driver in the sector. Source: DealFlowAgent, 2026.

UK Market Size: ~£9bn guarding, ~6,460 businesses

The private security guarding market, plus a further £2.1bn or so in electronic security systems. Large, fragmented and weighted towards owner-managed firms. Source: IBISWorld, 2025 to 2026. Approximate.

Licensed Workforce: 500,000+ active SIA licences

Held by around 459,000 individuals. A vetted, retained and licensed workforce is part of what an acquirer pays for, because it cannot be assembled quickly. Source: GOV.UK, SIA statistics, 2025.

PE Consolidation: 70% of 2025 UK fire and security deals PE-backed

Up from 57% in 2024, the highest PE concentration of any facilities-services subsector, with buy-and-build platforms rolling up owner-managed businesses. Source: Grant Thornton, 2025.

Demand Drivers: Martyn's Law, PSTN switch-off, BADR

Martyn's Law lifts demand for venue security from around 2027; the PSTN switch-off on 31 January 2027 forces monitored alarms onto IP signalling; and BADR rose to 18% from 6 April 2026. Source: GOV.UK / Home Office, Openreach, HMRC, 2025 to 2026.

The security business acquisition market in 2026.