Industry Description
The security services industry in the U.S. comprises providers of investigative and detective services, security guard and patrol operations, or armored transportation for cash, valuables, and sensitive materials (NAICS 56161). This industry excludes providers of credit investigations and sellers of security equipment.
The following are some basic characteristics of the security services industry:
- Security services industry has a combined revenue of $38.5 billion, with a growth rate of 1.6% in 2019-2024
- There are approximately 29,900 businesses as of 2024
- The security services industry employs approximately 875,000 people
Industry Trends
The security services industry is highly fragmented and has low levels of market share concentration, with the top four industry operators comprising approximately 21% of industry revenue in 2019. The largest players have 500 or more employees, while small players have 20 or fewer employees. Some key external factors that influence this industry are (i) corporate profit, (ii) number of businesses, and (iii) crime rate. Each of these is described in further detail below.
Corporate profit increases the demand for security services, which expands the industry. Corporate profit determines the renewal or upgrade of contracts and the recruitment of clients. When corporate profits increase, businesses are able to outsource security services such as guarding and patrolling. Additionally, in 2025 cyber-attacks have increased by 47% from 2024, which has increased the need for protocols and measures from outsourced security services.
The number of businesses impacts the demand for the industry because businesses are the largest clients. An increase in the number of businesses is an indicator of industry growth because guards protect company assets and properties. The entrepreneurial sector has been on an upward growth, where there are approximately 430,000 new business applications per month in 2024. Since the increase in business corresponds with high industry demand, the industry will see high growth.
The crime rate increases the need for implementing security services for businesses which outsource these services. High crime rates, especially in urban areas, increase industry demand because businesses want to ensure the safety of individuals and business properties. The crime rate in urban areas, while decreasing, is still at or near pre-pandemic levels. The industry is tasked with safeguarding against crime, which increases industry demand.
The security services industry in the U.S. has been influenced by external factors such as corporate profit, number of businesses, and crime rate. The growth in corporate profits and the number of new businesses allows the industry to grow. To capture this growth, security providers must be equipped to service the needs of protecting clients from both physical crime and cyber-attacks.
Key Performance Metrics
In evaluating the security services industry, the following metrics can provide useful information in comparing a subject company to guideline companies and transactions.
- Bill rate
- Client concentration
- Contract duration
- Renewal rate
- Service mix
- Utilization rate
Industry Organizations & Publications
The following organizations publish useful information:
- ASIS International
- International Association of Professional Security Consultants (IAPSC)
- National Association of Security Companies (NASCO)
- National Council of Investigation & Security Services (NCISS)
Guideline Information: Private Purchase Transactions
Most security services companies are privately owned. While there are publicly traded companies, data regarding the sale of 100% of closely held security services companies is generally the best source of information to appraise a subject company.
The following are typical appraisal multiples from sale of security services companies:
- Revenue multiples between 0.2 and 0.9 times
- Gross Profit multiples between 0.3 and 2.4 times
- EBITDA multiples between 1.8 and 14.4 times
In selecting guideline transactions, it is of critical importance to select transactions that are similar to the subject company. Unique factors for any subject company must be considered to yield credible results. Additionally, industry economic conditions also vary over time, which must also be considered.
Guideline Information: Publicly Traded Companies
Most security services companies are privately owned; however, there are a few that are publicly traded, meaning it is possible to compare a subject company based on industry metrics and appraise using industry multiples. However, as with the guideline transactions described above, it is of critical importance to select publicly traded companies that are similar to the subject company. Also be aware that multiples of certain publicly traded companies may not accurately reflect a subject company.
The largest publicly traded U.S. security services company is:
- The Brink’s Company (BCO) – $3.6 billion market capitalization
The Price-to-Earnings (P/E) ratio of this company is 23.0 times.
Appraisal Rules of Thumb
Please note you should never use a Rule of Thumb in place of a professional appraisal. You will never see a competent professional appraiser do their work using a Rule of Thumb. The professional standards that govern professional appraisal practice, which all professional appraisers should follow, specifically prohibit the use of Rules of Thumb.
Security services companies are businesses sold based on sound economics. These economic considerations can be measured using the key performance indicators described above, but such economics cannot be accurately summarized in these simple formulae.