KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** Comment on Valuing your alarm and integration business / Call to schedule ISC meeting February 29, 2024 ************************* ISC schedule ************************ LAST CALL FOR VENDORS TO PARTICIPATE IN K&K SCHEDULING PRIVATE AND GROUP MEETINGS. WE WILL BE FINALIZING TIME SLOTS AND TOPICS IN THE NEXT FEW DAYS. Dealers who want to participate in private meetings with me or vendors listed on The Alarm Exchange should contact Stacy Spector,Esq at 516 747 6700 x 304 or sspector@Kirschenbaumesq.com to schedule a time. Vendors who wish K&K to schedule meetings for them during K&K's private and group meetings should contact Stacy Spector,Esq at 516 747 6700 x 304 or sspector@Kirschenbaumesq.com now. Meetings [private and group meetings on scheduled topics] will be schedule for half to one hour, without charge, and conducted at the Palazzo Prestige Lounge. Times and schedule is limited so please contact Stacy soon as possible to request a topic or schedule an appointment. ************************** Comment on Valuing your alarm and integration business from article on February 16, 2024 *************************** Ken A few items to add to your list in terms of info helpful for selling: * Last year’s attrition rate * Monthly cost of cell or interactive, as many buyers are deducting this from gross RMR. * How the accounts are billed - % annually, quarterly or monthly PAP/ETF. Helps determine the deferred for buyer and seller. * Two big buyers in Canada are now looking for recent test signals. Last 30 days. Regards, Victor Harding Harding Security Services Inc. Tel: 416.925.7474 Cell: 647.290.7902 ************************** Response ************************** All good points and information that every alarm company owner should keep in mind. Attrition is normally of interest to a potential buyer because buyers expect accounts to last longer than the multiple paid and historical attrition is a fair parameter of what buyer can expect after the sale. A seller isn’t usually concerned beyond the guarantee period. Buyers, and sellers, should expect that all things being equal, there will be higher attrition after a sale. There are contractual conditions that sellers can impose in a deal, and all I can say is that you better have a very experienced alarm attorney to protect you on this issue. There is no universal rule on how alarm accounts are sold and how RMR is calculated; don’t let a potential buyer bully you into thinking their way is the only way. That is true only for them. Generally a seller can expect to sell based on “net” RMR, but again, how you get to net depends on what expenses you can deduct from the gross billing RMR. Buyers may be concerned with how accounts are billed because most deals will include a provision that the buyer can’t change billing cycles or practices, at least during the guarantee period. Signal history would tell a buyer what activity they can expect from the accounts. A new central station will want to know the account activation activity before offering pricing; in fact before agreeing to monitor the accounts. No one wants problem accounts with frequent false alarm activations. Alarms with test signals generally cost more to monitor. So does video or audio monitoring. A buyer needs to know that, especially if a move to a new central station is contemplated. ********************* STANDARD FORMS Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
