Despite estimates that the recent acquisition of Broadview Security by ADT (see SecurityInfoWatch.com news story on ADT-Broadview merger) will give the company between 35 and 45 percent of the U.S. residential alarm market, many dealers and central stations think that the deal bodes well for the industry.

Given the $2 billion price tag that Broadview sold for, which equates to a RMR multiple of 42 times RMR, ADS Security Chairman and CEO Mel Mahler believes that the purchase has set a benchmark that will help companies like his moving forward.

“The biggest benefit (of this acquisition) to our company is the fact that it’s pretty well established that the (RMR) multiple on (the deal) was in the 40s and those sized companies have been going in the 50 to 60 range,” he said. “And since we’re a company that does a lot of acquisitions, we’re encouraged by that.”

Mahler added that this may be a sign of things to come for the industry with more companies looking to sell this year.

“We’re sitting here already with great private funding… we can do deals and sellers are still sitting there with these high expectations,” he said. “I think this will get them to be realistic and also they’ve got to be looking at the tax increases that are coming for 2011 if not sooner. If you’re thinking of selling, this is the time to do it.”

Others in the industry, such as Ed Bonifas, vice president of Illinois-based Alarm Detection Systems and president of the Central Station Alarm Association, feel that their companies may benefit from a reduction in marketing budget by the new combined ADT/Broadview.

“I think that in a lot of ways what’s going to happen right now is that some of the marketing that the collective two companies had spent in the past won’t get spent this year,” he said. “My guess is that they will save some of that because they don’t need to go to market twice. At the same time I think there is opportunity for everybody going forward.”

Though Broadview is known for their low attrition rates, Bonifas said that other dealers could see some new customers if the transition doesn’t go as smoothly as expected.

“If they do a really good job of implementing they will keep most of their customers, but any acquisition is going to have some hiccups here and there and all of that brings opportunity for the other players in each market,” Bonifas said. “So, we’re kind of looking forward to watching this happen and to be there to pick up any pieces we can find along the way.”