Fire Alarm Distributor with Growth Opportunity

Longstanding, profitable fire alarm distributor based in the Midwest. This company, which has been in business for nearly 60 years, implements and services fire alarm equipment on construction projects.

The company procures business through a competitive bidding process run by an electrical contractor on a given project. Work includes engineering, submitting permit applications, supplying equipment, programming fire alarm panels off-site and then installing the programs on-site, and testing and certifying panels post-installation.

After a project is complete, this company works directly with the owner of the building, providing training, field assistance, and equipment for replacements. These end-user equipment upgrades and replacements comprise about 30% of the company's revenue, with the remaining 70% coming from new projects. In some cases, our client also provides monitoring and yearly testing services to building owners.

The company competes with a handful of other fire alarm manufacturers and distributors in the Midwest. They do not, however, anticipate any new entrants to the industry, as starting a fire alarm distributor from scratch requires a substantial investment of time and resources (between licensing, insurance, inventory, and minimum sales quantity requirements).

This company has the capacity to provide their services on small buildings up to large, multi-building projects and has implemented fire systems on a number of notable projects in the Midwest. The company is a premier distributor for a manufacturer with a reputation for producing high-quality fire systems. Our company's distribution contract allows for expansion to an additional Midwestern market with potential to expand to a third regional market as well. Current ownership has not pursued these expansion opportunities, which mark a significant potential avenue for growth for a new owner.

A new owner could grow the business by offering bi-directional amplifier systems, cameras, and security systems as well. Besides these additional products, a new owner could also conduct more testing, which comprises a much higher portion of some local competitors' business (upwards of 80%).