The short answer
A security business in Australia is priced on the earnings its contracts will keep producing after the sale, once every guard is costed at the correct award rate. We found no reliable published multiple, so the price rests on evidence about contracts, payroll and licences.
The nearest published figure is one disclosed sale. On 1 October 2025 Intelligent Monitoring Group told the ASX it would pay $4.2 million cash for BNP Securities, which supplies guards, patrols and alarm response, mainly in New South Wales. It anticipated pro forma annualised EBITDA (earnings before interest, tax, depreciation and amortisation) of $1.4 million, based on the seller's average earnings for the prior three years. The announcement gives no multiple; $4.2 million divided by $1.4 million is about 3 times, by our arithmetic. The price is subject to adjustments for working capital, cash and debt, and the announcement discloses no contract terms or retention. One buyer and one sale make a data point, not a benchmark.
Why do guarding, patrol, crowd control, installation and monitoring price differently?
They price differently because each earns money differently. Guarding, patrol and crowd control sell hours of labour, installation sells projects, and monitoring sells a monthly service.
The Security Services Industry Award 2020 covers guarding, patrol and crowd control, so margin in those segments is the gap between the client's hourly rate and award wages. Patrol adds vehicles, and crowd control follows events. The award also covers running a security control room or monitoring centre, but not installing, maintaining or repairing electronic alarm or monitoring systems, and installation revenue must be won again each job. Monitoring fees recur until a customer cancels, so a buyer tests how many accounts cancel each year.
One national business broker's March 2026 guide puts monitoring-heavy businesses at higher EBITDA multiples than installation-dominant ones, but it does not say which sales its ranges come from, so this page does not quote them.
What multiple do security businesses sell for?
We found no reliable published multiple for Australian security businesses. The broker guide cited here gives ranges but does not show the sales behind them. A valuer instead applies the factors below to normalised earnings.
| Factor | Pushes the price up | Pushes the price down |
|---|---|---|
| Contract term | Committed terms, recent renewals | Re-tender due, rolling terms |
| Client concentration | Many clients, none dominant | A few clients, a large share |
| Termination and change of control | Ends on default; consents held | Short-notice exit; consent on a sale |
| Payroll and contractors | Payroll matches the award | Underpayment; contractors who are employees |
| Revenue type | Recurring monitoring fees | One-off installation work |
| Licence and people | Licence stays; key managers stay | Licence in doubt; manager leaves |
Does the licence transfer when a security business is sold?
In an asset sale the licence generally does not move to the buyer, whose own company needs one. In a share sale it usually stays with the company, but regulators expect changes in officers and close associates to be reported.
The company needs a business (master) licence, and each operative needs an individual licence. The regulators include the Security Licensing and Enforcement Directorate of the NSW Police Force, the Licensing and Regulation Division of Victoria Police and the Queensland Office of Fair Trading.
Service NSW states that a master licence is not transferable, and its subclass caps how many operatives it can provide on any day (3, 14, 49 or unlimited). In Victoria, carrying on the business of supplying security staff without a business licence is an offence (Private Security Act 2004, section 5), and a business licence holder must report a change of officer or close associate within 3 days (sections 174 and 175). In Queensland, a company that changes its Australian Company Number must apply for a new licence, and officer changes must be reported within 7 days.
A buyer pays for contracts it can lawfully perform, so a deal needing a new licence usually cannot complete until it is issued, and a doubtful licence lowers the price.
Why does a buyer test payroll before agreeing a price?
Unpaid wages are both a debt to staff and a cut to maintainable earnings. A buyer who finds guards paid below the Security Services Industry Award has found back-pay for the past and a higher labour cost that the multiple then magnifies.
From the first full pay period on or after 1 July 2026 the award's Level 1 rate is $28.42 an hour, paid at 150 per cent on Saturdays, 200 per cent on Sundays and 250 per cent on public holidays, and 175, 225 and 275 per cent for casuals. A buyer reconciles the roster to payroll shift by shift and prices any shortfall as a liability.
The Fair Work Ombudsman says it is illegal to call a worker a contractor when the business does not reasonably believe it, with maximum penalties per contravention of $21,840 for individuals, $109,200 for businesses with fewer than 15 employees and $546,000 for businesses with more than 15. Since 19 December 2025 Victoria also requires an independent security contractor with an ABN to hold both a business and an individual operator licence, which Victoria Police says aims to stop sham contracts.
How do contract terms change the price of a security business?
A contract is worth the earnings it will deliver before the client can lawfully leave, so the notice period matters more than the stated term. A three-year contract that the client can end on 30 days' notice is priced as a 30-day contract.
Concentration works the same way: if one client supplies a third of revenue, a buyer prices its loss as a scenario, not an average. A termination for convenience clause lets a client end a contract without cause; a change-of-control clause lets it end or renegotiate when ownership changes. One Australian law firm's October 2025 note says government contracts often allow termination without reason and bar a change of control without prior consent.
Losing a contract can cost twice: the award requires 28 days' written notice to affected staff, and the Fair Work Act's redundancy pay rule applies to staff offered acceptable work by neither the outgoing nor the incoming contractor (clauses 29 and 32.4). Buyers respond with client consents before completion, a retention or an earn-out.
What should a seller have ready for a buyer?
A seller should have the evidence for each factor above ready, because gaps are read as risk and come off the price.
- ·Licences for each state, with class, subclass, expiry and every operative's licence number
- ·Contract register: client, dates, notice, termination, change-of-control and price-review terms
- ·Payroll and rosters by shift for 12 months, with contractor agreements and invoices
- ·Three years of accounts, with the owner's wage and one-off items shown separately
A worked example: how payroll and one contract change the price
Illustration only: a hypothetical guarding company, not a client, bills $3,000,000 a year and reports EBITDA of $450,000. The owner takes no wage, so an assumed market wage of $150,000 is deducted, leaving $300,000.
Payroll testing finds 10,000 hours a year, worked on nights, weekends and public holidays, paid at a flat $30 an hour. Assume the award rate for those hours averages $40 (Level 1 is $28.42 for weekday day hours and $56.84 on a Sunday). The shortfall is 10,000 hours x $10 = $100,000 a year, so maintainable EBITDA is $200,000. At an assumed 3.0 times EBITDA, which is not a benchmark, the price falls from $900,000 to $600,000. If the underpayment ran for 2 years (assumed), the back-pay is $200,000 before superannuation, interest and penalties: a debt that comes off the price or is held back, not multiplied.
One client pays $900,000 a year (30 per cent of billings) and can end its contract on 30 days' notice (assumed). If that contract adds $100,000 a year to EBITDA, losing it leaves $100,000, which supports $300,000 at 3.0 times against $600,000.
When the number has consequences
A formal valuation is worth commissioning in a security business when someone else will test the number: a sale or purchase, a partner or shareholder buyout, a restructure or related-party transfer, a capital gains tax event including a small business CGT concession claim, or an estate.
Oliver Group prepares independent valuations only. We are not a tax agent and do not give tax, legal or financial advice: your accountant and lawyer apply the valuation in their own fields. Reports follow the guidelines of APES 225 Valuation Services, and a report is not written to a predetermined number.
Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $3 million, a Large Business Valuation is $3,495 + GST for turnover between $3 million and $10 million, and above $10 million the fee is quoted in writing before work starts. A small-business report is delivered in 2 business days and a medium- or large-business report in 3 business days; above $10 million the delivery date is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.