How the Market is Bouncing Back from the Pandemic
- How the Market is Bouncing Back from the Pandemic - April 29, 2021
Just over a year ago, businesses in this country and around the world had to shift into a very different mode of operating as shelter in place and work from home became the new reality. Once we addressed keeping our employees and co-workers safe, the big questions on the minds of everyone in the security industry were, how would business be impacted? Who would want a technician or salesperson to come into their home or business? Would the demand for remote video and managed access control increase? What kind of attrition would we see?
For companies that were in the middle of making acquisitions, the uncertainty of the COVID reality led many of those would-be buyers to put on the brakes. How much to pay for a recurring revenue-based alarm company becomes very different consideration when fear of attrition going from 8% to 18% enters the equation. As a result, many buyers decided to take a wait and see approach, understandably. Some pushed ahead but changed the pricing or terms such as holdback percentage. Basically, merger and acquisition activity looked very different for a few months.
Then something happened that seems to happen regularly in the alarm industry: everyone was reminded how resilient it is. The mergers and acquisitions resumed. And from what we see at Alarm Financial Services, buyers and sellers are making up for lost time. Our perspective is focused almost exclusively on small to medium-sized companies, so the large players in the industry may be experiencing something different. But from where we sit, the action is heating up. Long-time owners still want to cash out and retire; young as well as mature companies still see the benefit in complimenting their organic growth with buying their local friendly competitor.
Learn more about AFS and its loan services at www.alarmfinancial.com, or contact Jim Wooster directly at 866-845-2678 x1200 or email@example.com.