Buying a Security Guard Business
First, the Qualifying Agent
Security guarding is a licensed trade, and the license decides the deal before price does. States license the company itself, in California as a private patrol operator, and the license rests on a qualifying agent: a named individual who meets the state's test and backs the company's authority to contract guards. If the selling owner is that person, the license outlives their exit only briefly, ninety days in California and sixty in Washington, so line up a replacement at close. Guards are registered separately on top of it, and in California registration carries 32 hours of training inside the first six months. Confirm the qualifier and the guard cards first: neither is a formality and neither survives a change of ownership by itself.
Why Searchers Look at Guard Companies
The draw is contracted, recurring revenue: guard companies bill clients monthly under standing post orders, and demand is non-discretionary and growing, pushed by public-safety concerns and thin police staffing. The market is deeply fragmented under a few global strategics, Allied Universal, GardaWorld, and Securitas, so a searcher buys a local or regional book below their attention and can exit to them later. The caveat leads into the next section: this is a labor-arbitrage business with thin margins, so the recurring revenue is real but the profit is a spread that must be defended, not a cushion.
What Guard Companies Trade For
Guard companies trade low because margins are thin. The publisher's security class opens with armed and unarmed guards before camera installation and monitoring. The publisher puts half the market between 1.95x and 3.29x SDE across 2021 to 2025, with a 2.61x median, a $750,000 median sale price and revenue at 0.49x to 1.14x. Advisors quote higher EV/EBITDA figures for platforms, but no publisher of sold data prints an EBITDA multiple for this trade, so read those as the exit rather than the entry. Where a business lands inside the sold band is the spread, contract stickiness, and management depth the next section covers; a book of low-margin contracts with the owner scheduling every shift is worth less than its revenue suggests.
The Bill-Pay Spread and Contract Risk
Two numbers and one risk decide a guard company. The first number is the bill-pay spread: the gap between what clients are billed per hour and the fully loaded cost of the guard, wages, payroll taxes, overtime, workers' compensation, and supervision. That spread is often single digits, so a small wage increase or a client that will not accept a bill-rate pass-through erases the margin. The second is contract concentration: a book leaning on one or two clients can lose most of its revenue on a non-renewal. The risk is turnover: guard attrition runs high, and constant rehiring and retraining is a real cost and a service-quality threat. Read the spread by contract, the client concentration, and the turnover before crediting the margin.
What to Verify in Diligence
The record to assemble before the offer holds:
- The qualifying agent, the company license, and whether the qualifier stays
- Guard cards current for every guard, and W-2 rather than contractor status
- Bill rate versus fully loaded pay by contract, and the real spread
- Client concentration, contract terms, renewals, and cancellation notice
- Guard turnover, overtime reliance, and open post coverage
- Workers' compensation history, experience modifier, and open claims
- Surety bond, general-liability limits, and any litigation
Financeability Notes
Guard companies finance under SBA 7(a), and lenders read contracted, recurring billing favorably, but they underwrite the thin margin and labor risk closely. Expect the lender to want the qualifying-agent replacement resolved, since a company that loses its license cannot bill, and to weigh client concentration and the workers' compensation record. Model debt service on margin that survives a wage increase, and net of a market salary for a scheduler or operations manager if the seller runs the posts, and stress the biggest client rolling off. The margin risk to underwrite is a wage or minimum-wage increase the company cannot pass through to clients, so read the bill-pay spread and the contract escalators, not just the trailing profit.
Terms in This Industry
Overtime share of hours
How much of the guard payroll is billed at premium rates because posts are short.
Qualifying agent
The named individual whose credential lets the company hold its license and contract guards.
Bill-pay spread
What a guard hour bills at, minus what the guard fully costs once every burden is counted.
Post orders
The written instructions for a specific site, which define what the officer standing there does.
Immediate production of records
Florida requires a licensee's records to stay in the state and be produced immediately on request.
Guard card lead time
In California, state approval is the gate to work; the plastic guard card follows later.
Observe and report
The floor of what an officer may do, which is what any private person may do.
Bill rate escalator
The clause that raises what a client pays each year, or the silence where that clause should be.
What the Data Says
BizBuySell's security company benchmarks blend guarding with alarm installation and monitoring. They put sold earnings multiples at 1.95x lower quartile, 2.61x median, 2.73x average and 3.29x upper quartile, on a $750,000 median sale price and 0.85x revenue, at 186 median days on market. Contract-guarding books trade inside that blend, and payroll discipline is what the multiple is really pricing.
Source: BizBuySell, security company valuation benchmarks (2021-2025 sold listings)
Securitas's own interim report for January to June 2026 names what the global strategic bought in the half: three US businesses, Sonitrol Fort Lauderdale, Level 5 Security Group and ZulaFly, beside purchases in Canada, Türkiye, Denmark, Australia and South Africa. The period's acquisitions carry an enterprise value of 289 million kronor, and it sold its US airport security business, Global Elite Group, in the same half. What it bought is electronic security and monitoring more than guarding, a reading of where a strategic's appetite sits.
Source: Securitas AB, interim report January to June 2026, acquisitions and divestitures (page 13)
California licenses the operating COMPANY, not only its guards: no one may engage in the business of a private patrol operator without a license, which runs through a named manager the bureau may examine, and every guard is registered separately. A buyer inherits a license that depends on a person, so the qualifier and the guard cards both have to be in order at close.
Source: California Business and Professions Code section 7582.3
Enter earnings to apply this industry's cited band.
A sanity check against asking prices, not a valuation.
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Who Else Is Buying in This Industry
- Sunstates Security · Raleigh, North Carolina
A Raleigh guard company in the country's top ten by its own count, compounding a quarter a year and buying regional guarding firms rather than security technology businesses.
- WATCH GUARD 24/7 · 2025 · Built as a solution-based security guarding company specializing in an increasingly large market of providers.
- Allied Universal · Irvine, California
Regional security-guard companies bought into a continent-spanning guarding network, the giant a security-guard searcher meets as the market's ceiling-setting bidder and eventual exit.
- IPS-Patriot · 2025 · A New Mexico security guarding company, folded into the national branch network.
- 10 more confirmed on the firm's profile
- Harvard Protection Services · New York, New York
A New York guard firm with more than ten thousand officers across forty-eight states that buys second-generation family guarding companies, and folds them into its own book.
- Motivated Security Services · 2023 · A second-generation privately held security services organization founded in 1969.
Buyers is the shelf these come from, ordered by who closed something most recently.
What It Costs to Replace the Owner
The multiples above are quoted on SDE, which adds the owner's pay back into earnings, so they hold only if you do the owner's job. Hire someone instead and the going rate for the role comes back out. For this trade that is usually the supervisor over guards and posts, paid a median of $55,940 a year nationally. Subtract it from SDE before applying any multiple, because at a 3x multiple that wage also takes about $167,820 off what the business is worth to you.
First-line supervisors of security workers, BLS Occupational Employment and Wage Statistics (2025), national, all industries, before payroll taxes and benefits. Every role, and the same arithmetic worked end to end, is in Manager Wages.
The Numbers That Run This Business
- Bill-pay spread by contract
- Client concentration and top-account share
- Guard turnover and open post coverage
- Overtime reliance and workers' comp modifier
- Qualifying-agent and guard-card compliance