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The Price family showed us how to build an alarm business

B.C.-based Price’s Alarms is a great example of a Canadian success story in the alarm and monitoring industry

December 1, 2020  By  Victor Harding

I want to pay tribute to the Price family — Bob, Peggy and Kevin — for the truly amazing job they did in building Price’s Alarms over many, many years into one of the premier alarm dealers in Canada

As many of you know, the Price family recently sold the company to Telus.

Before they sold, Price’s was the largest independent alarm company in Canada and would have stacked up against many large U.S. independents.

On top of that, they were an active buyer of alarm accounts.


For me, as a broker, Price’s was always a potential buyer for any block of accounts I had for sale on Vancouver Island, any part of the B.C. lower mainland and even into the interior of B.C. What was good about dealing with Price’s is they liked to buy, they knew how to buy, they had the money to buy and, most importantly, they were not afraid to pay a full price for a good set of accounts. In my field, these are all important factors.

As a reasonably active and successful buyer, there may be things to learn from Price’s approach to acquisitions.Bob Price told me he of-ten bought in order to get into a new market or establish a new office. They did this when they first came to the B.C. lower mainland from the Island.

On the Island, where they were a dominant player, Price told me they were motivated by the opportunity to “enhance our current base” or build density. It did not hurt that they were also taking out a competitor.

The multiples they paid, which varied between 30-40X RMR, depended not so much on the mix between residential and commercial but “on the strategic importance of establishing a new market or gaining dominance in an existing market,” according to Price.

Finally, he indicated that in the earlier years, acquisitions really contributed to Price’s growth but in later years, acquisitions were needed because organic growth was not able to stay ahead of normal attrition.

As a family, the Prices will be sorely missed in the Canadian alarm industry.Switching gears, because I have been quite busy these days doing alarm account deals, I want to pass on some more advice to those who still own monitored accounts and think they might want to eventually sell them. You will have heard some of this from me before.

Alarm accounts in Canada are still selling despite the pandemic, and so far at prices close to what they have always sold at. But note that south of the border the market for alarm accounts is cooling off, and not because of the pandemic.

My take is multiples just got too high and attrition started to climb.

Whether that trend comes to Canada remains to be seen. Certainly the market for alarm accounts in Canada is not as crazy as it used to be. Buyers are being more discriminating.

I have noticed it is much harder today to sell smaller blocks of accounts, i.e. blocks under 300. These smaller blocks are selling to smaller buyers at lower multiples. Some of the bigger buyers won’t touch anything under 500 accounts; the transaction costs are too high.

There is a divide starting to show in the market between what I will call “old” accounts and “new” accounts. Old accounts tend to be priced lower (average price under $25/month), are on older panels and do not have cell or Alarm.com service on them.

New accounts tend to be higher priced ($30/month or higher), have newer panels installed on them and a higher percentage of cell or Alarm.com installed on them. Amazingly enough, some dealers still think they can install an alarm panel, not touch it for 15-20 years and expect to get the same price for that account as an account with newer panels. If you want a decent multiple for your accounts, upgrade your panels.

Here are some other trends. Commercial accounts seem to be in more demand than residential.

The telcos like Telus, Rogers and Bell are dominating the residential market more and more with offers that independents cannot touch. If you don’t have signed contracts on your accounts, don’t bother trying to sell them. If your accounts are programmed to your station’s line, be prepared to have to move them to the buyer’s station.

If they are priced under $25/month, be prepared for a lower price. As for the billing function, it is amazing to me that more alarm dealers have not moved their customers to monthly pre-authorized payment (PAP) and still bill their accounts annually by in-voice!

Not only is PAP a less expensive way to bill, the stats show that there is less attrition and buyers will love you. Finally, annual billing is also a complete pain when it comes time to sell because the seller almost always thinks the resulting large deferred revenue deduction is unfair.

My last two tips are about price expectations and getting advice.

Too many dealers have unrealistic expectations of what their accounts are worth. If you are selling 250 accounts, don’t expect a multiple of 35-36X RMR. Think 30X. If you are selling 1,000 accounts don’t expect a multiple of 40X. Think 35-36X.Lastly, there is a lot more to selling a block of alarm accounts than some dealers think.

To get the best possible deal, you need to canvass several buyers, not just one or two.

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