50x or 60x multiples forecast at Barnes, Buchanon, Mallon Conference
February 8, 2005, Palm Beach, Florida — Ron and Beverly Davis, principals in Davis Marketing Group, recently participated in the Barnes, Buchanan, Mallon Conference held at the Breakers Hotel in Palm Beach, Florida . The conference was highlighted by presentations by Jim Covert, President Honeywell Security Protection, as well as Richard Ginsburg, President and CEO of Protection One.
Both presentations indicated that both companies were going to move further ahead on the acquisition
trail. With two of the three largest companies active in the pursuit of new acquisitions, it is likely that multiples for alarm companies will start moving upwards.
In his presentation, Covert commented that Honeywell would be buying companies based upon a multiple of EBIDTA (earnings before interest, taxes, depreciation and amortization). He indicated that by using the EBIDTA multiple formula that the RMR multiple might increase … suggesting that acquisitions in the 50 or even 60X RMR range might be possible.
Mr. Covert also recognized Managing Partner, Ron Davis, for the work and contributions he has done in the alarm industry.
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