What multiple do fire safety companies sell for?

Fire safety companies are commonly valued as a multiple of recurring fee income or of adjusted EBITDA, with contract-rich operators at the upper end and project-led installers at the lower. Where a company sits depends on the factors below.

How is adjusted EBITDA worked out, and why does it matter?

Profit before interest, tax, and the write-down of equipment, vehicles and other assets, adjusted so the owner's remuneration reflects what a manager would cost and one-off items are removed. It matters because the multiple is applied to it, and a buyer will normalise the figure before making an offer.

Which factors move a business up the valuation range?

Four things, in order of weight: the share of revenue under signed service and inspection agreements; certification scope and the qualified individuals supporting it; contract length and demonstrated renewal history; and low customer concentration. The first three add, the fourth only subtracts. All four respond to preparation over quarters rather than to a good final year.

Why do offers on the same business vary so much?

Because different buyers are valuing different things. A backed platform prices contracted income and certification scope, an adjacent compliance group prices overlap with clients it already serves, a trade buyer prices geography and engineers, and a management team prices continuity within tighter funding. Running a process rather than taking one approach is what reveals the spread. One offer tells you what one buyer thinks, which is not the same as knowing what the business is worth.

Multiples in Fire Safety: What the Ranges Mean and What Moves You Up Them

The published ranges describe a spread, not a going rate

Fire safety businesses in this market are usually priced at a multiple of recurring fee income or of profit, meaning so many years of one of those figures, with contract-rich operators at the upper end and project-led installers at the lower. That spread is the whole point: two firms making the same profit can sell for very different prices, and the one with more maintenance contracts sells for more years of that profit.

It is worth being precise about which profit, because that is where most confusion sits. Buyers use adjusted EBITDA, which here means profit before interest, tax, and the write-down of equipment, vehicles and other assets. The owner's pay is normalised, meaning reset to what a manager would cost, and genuine one-off items are removed. An owner paying themselves well below market rate is inflating the figure the multiple is applied to, and a buyer will correct it.

Two businesses with the same adjusted EBITDA can therefore sit well apart on the multiple, which is a far larger difference than anything either of them will achieve by growing revenue in the year before a sale. That is the practical argument for treating the multiple as the thing to work on.

Four factors decide where in the range a business sits

Recurring share is the first and the heaviest. The proportion of revenue arriving under signed service and inspection agreements, as against installation and reactive work, does more to set the multiple than any other single factor, because it determines how much of next year's income a buyer can model rather than hope for.

Certification is the second. BAFE scheme registration with a scope covering design, installation, commissioning and maintenance, supported by properly qualified nominated individuals and a clean audit history, is capability an acquirer cannot assemble quickly and therefore pays for. Since the SP203-1 Level 3 qualification requirement took full effect in Nov 2025, that capability rests on named, qualified individuals.

Contract length and renewal history is the third: agreement terms, notice periods, and what proportion of the base actually renewed in each of the last three years. Customer concentration is the fourth, and it works only downwards. A book where one client holds a big share of contracted income is discounted regardless of how good that client is, because the buyer has to model the renewal it does not control.

Behind all four sits a condition that is rarely stated: whether the numbers can be evidenced. A claimed renewal rate that cannot be reconciled to the service records is treated as an estimate, and estimates get discounted. The same figure supported by three years of visit data and signed agreements is treated as a fact. In this sector the distance between a claim and a fact is worth real money on the multiple.

The same business is worth different money to different buyers

The range also reflects who is at the table. An investor-backed group buying up firms in one region values contracted income and certification scope, and will pay towards the top for both. An adjacent compliance or facilities group values the ability to service clients it already has, and pays for how well your rounds fit alongside its own. A similar-sized firm from the same trade values geography and engineers. A management team values continuity and is usually the most constrained on funding.

That is why a single approach tells you so little. One offer is a data point with nothing to compare it against, and the gap between the highest and lowest serious offer on the same business can be wide enough to change what an owner does next. Getting more than one buyer interested at the same time is not a trick. It is the only way to see the whole range rather than one point inside it.

It is worth saying what does not move the multiple much. A strong final year of installation revenue, a new depot, or one large project all look like progress and change the figure far less than owners expect, because none of them alters what a buyer can model for next year.

In practice, then, work on the four factors, because they move the multiple and they are yours to move. Then let more than one buyer look at the result at the same time, because that is what decides which end of the range applies on the day.

Find Your Place In It

The four factors above are what the valuation tool weighs, applied to your figures rather than to a published range. It takes under 15 minutes, in confidence.

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If you are a few years from selling, Nick Hunt can help you plan and do this work as part of the Reads Pre-Sale Programme.