With 30 announced buys in 2024, Pye-Barker Fire & Safety dominated the landscape of mergers and acquisitions (M&A) in the fire and security space last year, as it did in 2023. But while Pye-Barker was the name most often on the industry’s lips — and likely completed the most deals — there were several other active buyers in the space. A common theme among many buyers was adding services, including and especially in fire protection.
At the November 2024 Securing New Ground Conference, John Mack III, executive vice president of Los Angeles-based Imperial Capital, described the industry’s M&A activity level as improved compared with 2023’s, but down overall compared with 2021’s. Although some think the security industry is experiencing a scarcity of sellers, others say that the market continually ebbs and flows, with new security businesses turning up in due course.
Professionals in the M&A space say that equity capital through both private equity firms and corporate buyers, as well as debt capital, are well-supplied and there isn’t too much concern about higher interest rates due to recent rate cuts. These factors help set the stage for a healthy level of M&A in security in 2025.
The Buyers
Pye-Barker’s pace of acquisitions — as the buyer in a buy-and-build strategy — is astonishing to many industry insiders. Today, the Alpharetta, Ga.-based company ranks No. 849 on the Inc. 5000 list of fastest-growing private companies and No. 8 on the SDM 100 Report of the largest security companies. Four years ago, the 78-year-old fire and security business was barely a blip on the radar.
Today, Pye-Barker is the most prolific newsmaker. “In fact, you just hear about somebody [being bought] every week, or two or three a week,” says Amy Becker, president of Astute Financial Consulting, Fort Collins, Colo. “I thought, ‘Boy, they sure are taking over the world because it feels like they’re just buying up everybody.’”
Since Altas Partners’ majority investment in the company in June 2021, Pye-Parker has added more than 100 dealers that specialize in fire protection, sprinklers and security systems, many of which were started by entrepreneurs. Today it operates nationwide with 7,000 employees across more than 230 locations. With many of its targets focused on life safety services such as fire alarms, extinguishers/suppression systems, and sprinklers, Pye-Barker says it has a mission to become “the national provider of choice for full fire code compliance.”
Jim Stewart, owner of Legacy Security Consulting, Naples, Fla., says, “Clearly, the rapid pace and overall span of Pye-Barker is certainly the industry headline for 2024. No other company has ever so aggressively and quickly risen from near obscurity to land on the SDM 100 adjacent to Vector and Bay Alarm. They are now one of the few largest in the country — quite impressive.”
We don’t see as many startups. We don’t talk to as many people as we used to who want to sell their companies. I cannot find a strong, independent company that’s looking to sell.
Operate as if You’re Selling Now
In addition to producing solid financial statements — the income statement, the balance sheet, the cash flow statement — other reports can assist sellers and buyers in gaining a detailed performance picture. For security integrators who may not have much recurring monthly revenue (RMR) but are more project-based, a key metric that would assist them is one that shows gross margin on closed projects, he says.
One of the most essential reports for companies that do have an RMR component is the RMR Roll Forward. “It helps identify the two critical key metrics in a business that exist to create recurring revenue: attrition and creation multiple,” he explains.
An RMR Roll Forward report shows the amount of RMR a company has at the beginning of the month, the amount added, the amount lost, and the ending RMR. Over time this data enables security companies to calculate their attrition, rate of growth, and cost to create that RMR — called the creation multiple.
“The quality of your recurring revenue is, in part, measured by its attrition,” Wiesenfeld says. “So an RMR Roll Forward is critical to have as a non-financial statement metric so that you can report on something that’s very important.”
Astute Financial Consulting provides the tools to help security companies create Excel-based financial statements and refreshable reports based on SedonaOffice data, such as an RMR Roll Forward and others.
“Along with our expertise in the industry, we can help some of the smaller companies do some sophisticated reporting that they wouldn’t otherwise be able to,” says Amy Becker of Astute Financial. She describes Astute as an industry partner that helps security companies with accounting, but also enables them create reports for their entire operation. In addition to RMR Roll Forward, there are technician productivity reports, service reports, job-costing reports, margins on installation, service and monitoring — “everything that you would need to run an alarm company, we have,” Becker says.
Astute Financial’s products and services help get people prepared for what they need to give to a bank or a buyer if they’re interested in selling. “And just from our experience, when you run your company as if you’re going to sell it, you are running it better. You’re going to get better results when you’re following things the way a bank would want you to or a buyer would need you to,” she says.
Stewart asserts that Pye-Barker has transformed the once undervalued commercial fire space to “the most prized of all accounts.” He recalls that six or seven years ago, buyers had little interest in fire protection, giving it a value less than residential recurring monthly revenue (RMR).
“Almost no one would apply a value to test and inspection and now it, too, can be bundled into the sale of fire accounts as a premium. We just started providing a free company valuation for fire-related companies and sellers are often shocked at just how much their company is actually worth,” Stewart says.
Fire protection was prominent last year among more than a few active buyers, including RapidFire Safety & Security, Summit Fire & Security, Zeus Fire and Security, and others. Pavion, Allied Fire & Security, CertaSite, Guardian Alarm, and Europe-based Scutum, which has done several acquisitions in the U.S. recently, were among the active buyers.
St. Louis-based RapidFire has done 12 acquisitions since fall of 2022, working with Concentric Equity Partners. The most recent buys included Albuquerque Low Voltage, Texas Star Fire Systems, and Troy Alarm. RapidFire’s founder, Mike McLeod, is a long-time executive in the security and life-safety industry, perhaps best know for his time as president and COO at Interface Security Systems. RapidFire calls its approach a multi-regional buy-and-build strategy, concentrated in the Midwest, Southwest and Western U.S.
Security professionals may be familiar with the well-established security dealers Alert Alarm Hawaii, SMG Security Holdings, PASS Security, Independent Alarm, Universal Atlantic Systems (UAS), and Skynet Security Systems — all acquired by Chicago-based Zeus Fire and Security since it was founded in 2022. Zeus describes itself as a platform business seeking partnerships with leading fire safety and security operators in premier markets. Its services include fire system installation, testing, and inspection; physical security system installation; and video monitoring.
Based in St. Paul, Minn., Summit Fire & Security, a subsidiary of SFP Holding Inc. (includes Summit Fire Protection, Summit Fire Consulting and Summit Fire National Accounts), announced 14 acquisitions last year, the latest being Cartersville Fire Protection.
Ken Wiesenfeld, principal, Wise Financial Consulting (formerly X-IT Strategy Consulting), Park City, Utah, clarifies the focus of integrators in the M&A market today. He sees a lot of cross-over between pure-play traditional security integrators and pure-play fire integrators.
“Most security companies that I interact with will do some kind of fire — usually fire alarms — and companies that do fire will sometimes get into security. The reason for that is they’re working with a client who has a need and if they do a good job with their initial discipline, sometimes they get asked if they do other work.
“The name Summit is normally a name that you would hear as someone who buys fire,” Wiesenfeld explains. “But it’s almost impossible to look at companies to acquire today that don’t have a little bit of both. Generally, most of them have a profile, so even though there’s a company out there that has a mix of revenue in fire and security, the mix or the size or strategy may or may not work for them. There’s an element of what I like to call ‘guardrails’ around which they’ll consider a company and make an offer.”
He says there are a meaningful number of companies that are actively pursuing an M&A strategy for growth in fire and security. “It’s a very active industry for those that want to sell,” Wiesenfeld says.
Another active buyer, Chantilly, Va.-based Pavion, celebrated its two-year anniversary in October 2024, noting, “In the past two years, we have completed 12 strategic acquisitions, broadening our expertise and service capabilities. This growth has enabled us to expand across 70-plus U.S. locations and 23 countries, positioning Pavion as a global leader in the industry.” The company ranks as No. 4 on SDM’s Top Systems Integrators Report.
Pavion’s partnership with private equity firm Wind Point Partners, in 2020, has allowed it to acquire some of the biggest names in security integration, starting with Corbett Technology Solutions Inc.’s (CTSI) launch as Pavion, and adding RFI Enterprises, Integrated Security and Communications, Signet, Netronix, AFA Protective Systems Inc., and many others. At Pavion’s helm is well-known integrator, CEO Joe Oliveri.
The Sellers
Rory Russell, owner of AFS Mergers & Acquisitions, Kattskill Bay, N.Y., says there are now more than two-dozen active private equity players, as well as corporate buyers like APi Group and Convergint Technologies, among others. The entry of multiple, very-large-cap private equity firms — Apax, Blackstone, Carlyle and KKR — will likely accelerate the pace of M&A activity, Russell says.
The advantage for sellers is that increased competition from numerous private equity firms as well as corporate buyers tends to drive up valuations. “Most private equity platform companies have ready access to growth capital,” he notes.
Naturally, the industry is still following the ADT Commercial acquisition. “In October 2023, ADT Commercial transitioned into a standalone organization and they rebranded as Everon following the acquisition by the private equity firm GTCR,” describes Saliq Khan, managing partner at Strenuus Capital Partners, New York. “I feel this strategic move allows Everon to focus exclusively on commercial security and fire services, which should help it enhance its position in the market.”
Conversations about M&A in the security industry usually come back around to Pye-Barker though — not only regarding their strategy, but their effect on the industry in light of the sheer number of dealers they’ve acquired over the past few years.
Khan believes their strategy is to become the leading national provider of fire protection, life safety and security services. “The acquisition strategy they have is focused on expanding the geographic reach and service offerings, and they effectively target companies that align with those core values and that complement the full suite of services,” Khan says.
“Pye-Barker is very active and seems willing to acquire a variety of companies — fire alarm installation and service, extinguishers, sprinklers — even residential providers,” Russell notes.
Ron Davis, managing partner of Davis Group Mergers & Acquisitions, Long Grove, Ill., wonders where the Pye-Barker acquisitions have left the faction of independent security dealers who make up the bulk of the industry.
“The reality is Pye-Barker is taking out the top tier of larger independent companies one by one,” he says. “And this is not from inside information — it’s just my opinion — apparently, they’re doing it with unlimited financing available and no limit to what they’re willing to do to get a quality company,” Davis says. “From everybody I’ve talked to who’s been acquired by Pye-Barker, it is the … best thing that’s ever happened to them.”
“The Pye-Barker effect is almost unbelievable in the sense that I think they’re going to be the biggest company in the industry probably by the end of 2025, possibly even 2024,” Davis says, adding that the company is managing its buy-and-build strategy the right way.
Davis thinks the industry is undergoing a restructuring. He points to a time in the recent past when growth companies acquired independent security companies simply to operate them for an eventual exit and high selling price. But with Pye-Barker— and perhaps some other of today’s buyers — they have a strategy that keeps them in the industry for the long haul, he believes.
“I think the things that Pye-Barker does will be accretive to the industry,” Davis says. “Certainly to all of the companies that they’ve acquired they’ve added a level of financial security that independent dealers just have never had. So I think Pye-Barker is either there or will be getting there very shortly of being largest company in the industry.”
Clearly, the rapid pace and overall span of Pye-Barker is certainly the industry headline for 2024. No other company has ever so aggressively and quickly risen from near obscurity to land on the SDM 100 adjacent to Vector and Bay Alarm. They are now one of the few largest in the country — quite impressive.
He also thinks the security industry, as it had traditionally been structured, is shrinking because of acquisitions. “We don’t see as many startups. We don’t talk to as many people as we used to who want to sell their companies. I cannot find a strong, independent company that’s looking to sell,” Davis notes.
Others, like Wiesenfeld, see the consolidation but acknowledge that the industry also eventually expands again. “I think for as long as I’ve been in the industry, I would say it’s an industry that consolidates. And then, lo and behold, there are still many people that enter into it in various shapes and forms. It’s very much an evolving space in that way,” he says.
The Outlook
Today, interest rates — and everyone’s expectations for future interest rates — are declining, says Mark Melendes, managing director and group head, Security Industry Group, CIBC Bank, Chicago. “This should accelerate M&A activity, as interest rates play a role in the willingness of acquirers to borrow money, and it should help buyers and sellers find a broader valuation zone of agreement,” he says.
Les Gold thinks the market is excellent for selling companies today. Gold is partner and chair of the Security Alarm & Monitoring Technology Practice Group at Mitchell Silberberg & Knupp LLP, Los Angeles; as well as counsel to the California Alarm Association and SDM’s contributing legal columnist.
“Interest rates were fairly high, relatively speaking. They are coming down a little bit; whether they continue to come down or not remains to be seen, but I don’t think that affects the industry,” Gold explains. “In matters that we’re involved in, I’m only aware of one situation where the potential buyer is concerned about interest rates. They backed off a little bit — they wanted to wait.”
Wiesenfeld says that based on his exposure to companies in fire and security, both equity and debt capital are readily available to the industry. The debt market features a number of both local and security-industry-focused providers. “And certainly, equity [since], that’s really where all of these acquisitions of these buy-and-build strategies are coming from,” he says.
Melendes also confirms that the availability of debt capital is strong. “There are more than a half dozen active banks that understand RMR lending in the security industry. And increasingly, there are a number of unregulated or non-bank lenders active in the security space, as well,” he says.
Russell of AFS Mergers & Acquisitions says there are plenty of “dry powder” funds from numerous private equity sources, especially the newer, large-cap private equity entrants. “However, these firms will be very selective,” Russell says. While credit continues to be available for companies with good financial performance, yet tight for businesses with marginal cash flow, he says.
Among the buyers that Gold is recently working with, some are existing security companies and some are private equity companies. “In private equity, you’ve got Egis Capital, Lee Equity, Cobalt, Alpine, Victor Capital — these are just some of the names who’ve contacted us looking for content and looking for material and we’re dealing with them as we are with some of the local companies,” Gold notes.
His bottom line: “There is money available in the marketplace to acquire companies. Today is a good seller’s market,” Gold summarizes.
While many factors are in place for an outstanding year in 2025 for mergers and acquisitions, there is still one big question mark: artificial intelligence (AI) and the many ways it is expected to affect the security industry.
“If I say, what is the one area which is going to influence the industry more than any other? It’s artificial intelligence,” Gold says. “No one, to my knowledge, knows the answer totally, but it’s going to be there.
“Artificial intelligence is really influencing every aspect of the market, in my opinion. I think some of the smaller companies are concerned about it, which is their rationale for maybe thinking it’s time to get out. Because if you’re not staying up with technology, in my opinion, you’re going to have difficulty as time goes on,” he describes.
Gold specifically references Pye-Barker and the types of companies they’ve bought. “They’re buying everything in sight and not just traditional alarm, which is where they started out. And I think the companies who are doing the acquiring are companies who are really concerned about AI, where it’s going and how they can implement it,” Gold suggests.
Most would probably agree with Gold when he says that five years from now, when the industry looks back, they are going to agree there were a lot of surprises.
Financial Services for the Security Industry
The following companies contributed to this article. Here are more details about the services they offer:
Acquisition & Funding ServicesAcquisition & Funding Services specializes in fire, CCTV, integration and security alarm business acquisitions, sales and mergers. AFS provides a variety of services including business valuations, guidance through the selling process, and more to security and fire businesses large and small. Over 20 years of experience.
Astute Financial ConsultingAstute Financial Consulting is a provider of security industry reporting and accounting support services. The company leverages Vivid Reports business intelligence tools to deliver robust financial and operational reporting while improving and streamlining month-end accounting processes.
CIBC BankCIBC provides access to credit, treasury management, private wealth, and other financial services to fire, security, video, access control, systems integration, and medical alert firms. Led by a group of industry veterans, their banking team combines financial expertise with deep knowledge of the security and life safety business to deliver solutions and services tailored to their customers’ goals.
Davis Group Mergers & AcquisitionsDavis Group Mergers & Acquisitions assists alarm and integration company owners to prepare, market and sell their companies throughout North America. Company founder and author, Ron Davis, has addressed thousands of professionals as a keynote speaker, association trainer and raconteur at countless industry events.
Legacy Security ConsultingLegacy Security Consulting is dedicated to bringing buyers and sellers together in the security and fire alarm space. The company’s services are built on a foundation of discretion, professionalism, and a commitment to protecting its clients’ interests throughout the entire process. Discretion is paramount at Legacy, which aspires to serve companies of all sizes. Legacy is a full-service company that does the hard work to find the perfect fit buyer for its clients.
Mitchell Silberberg & Knupp LLPMSK has represented the largest and most recognized names in the industry, and has navigated many hundreds of mergers and acquisitions. MSK’s security alarm and monitoring technology specialty practice includes stalwart members that have authored California’s alarm licensing law, as well as contracts that are in wide use today.
Strenuus Capital PartnersStrenuus Capital Partners is an investment firm with a dedicated focus to invest in companies across Flow Control, Safety & Security, and Industrial Automation. Led by a seasoned investment professional with years of experience at Credit Suisse and BNP Paribas, the firm is built on a foundation of industry expertise and a results-oriented approach.
Wise Financial ConsultingWise Financial Consulting offers financial leadership along with interim and fractional tailored accounting, finance, treasury, acquisition advising and project management (both sell side and buy side), as well as business brokerage services. The company works across multiple industries, specializing in the electronic security and fire industries. Led by founder and security industry veteran, Ken Wiesenfeld, and 15 team members, Wise has worked with more than 175 companies over the last 10 years.
