Companies who are strongly considering an acquisition in 2025 may wish to turn their attention toward the fire safety sector.
While it may not be as cutting-edge or dynamic as other options (cybersecurity and AI, for instance), the fire safety market is one that promises numerous opportunities for growth and profit.
Not only that, but it is a diverse and resilient sector with a wide range of acquisition targets to consider – from micro entities all the way up to large and well-established fire safety businesses. This gives you a broad spectrum of prospects to consider, according to your unique acquisition strategy and budget.
Keen to find out more? Let’s explore the world of fire safety and ponder the pros and cons of acquiring a business within this market, as well as how to go about it!
Understanding the fire safety sector
Before we explore the reasons for and against investing in a fire safety business, let’s take a closer look at the market segmentation and the array of products and service lines that characterise fire safety.
One area of specialisation is known as passive fire protection. This includes fire doors, fire walls, dampers and flame-resistant materials. These fittings don’t actively inhibit fire – hence the word ‘passive’ – but play a crucial role in stopping it from spreading.
Passive fire protection systems tend to work according to a system of compartmentation, which focuses on creating fire-safe areas such as hallways, exits, and stairwells. An effectively installed system works by protecting vital parts of the building, allowing people to make a safe escape while also helping fire crews to safely and efficiently put out the flames.
The other main segment of the fire safety market is active fire protection. This focuses on products and services designed to play an active role in extinguishing fires, such as smoke detectors, fire extinguishers, sprinkler systems and fire alarms.
When buildings combine these two systems, they significantly increase their fire safety and optimise the chances of both the inhabitants and the building itself surviving a blaze.
However, there is also another vital element that needs to be put in place, and this is where another segment of the fire safety market comes into play. Characterised by organisation, monitoring, training and assessment, this part of the market focuses on the services and actions that need to be taken to improve fire safety. Consequently, companies operating in this portion of the market will provide a range of services and solutions, spanning fire risk assessments, fire safety training, compliance, and evacuation plans.
Pros and cons of acquiring a fire safety company
Let’s uncover the most significant advantages and disadvantages of investing in a fire safety business.
The benefits
Arguably the biggest upside of choosing this sector to invest in is the size, its growth potential, and the revenue it pulls in on an annual basis.
The fire safety market is worth billions of pounds a year and comprises well over 2000 different companies of diverse sizes and specialities. As a result, it’s ideal for acquisition strategies focusing on consolidation, although you may also stand to reap significant rewards from acquiring just one or two businesses.
In terms of resilience, due to the vital life-saving nature of this sector, it is more capable of withstanding periods of economic difficulty than others. This is because of the continuing need for the maintenance of fire safety measures in buildings ranging from workplaces to rental properties and privately owned homes. The tightening up of fire safety legislation is a prominent force behind this ongoing need for upkeep – particularly in the wake of the tragically avoidable Grenfell fire, which triggered dramatic changes in fire safety requirements.
The takeaway? If you are keen to find a foothold in a growing, robust and valuable sector, then the fire safety market could be the perfect option for your M&A strategy in 2025 and beyond.
The downsides
As you can probably gauge by now, the fire safety market has several attractive qualities for would-be investors.
However, it’s also important to recognise that not every segment of the sector is likely to be as robust or value-enhancing as others.
For example, the passive fire market is not likely to be as consistently profitable, as passive fire products don’t require the same amount of maintenance as active fire safety products. This means fewer scheduled appointments and, therefore, less profit.
Similarly, the need for passive fire protection products tends to be closely linked to the new-build property market, so fluctuations in one market can impact the other. As a result, it’s important to consider the outlook for the property sector – in particular, new-build housing – if you’re planning to invest in passive fire safety.
It surely goes without saying that acquirers should also consider the individual businesses they’re considering buying, as various factors can affect their scalability and profitability.
These factors range from the type of clients they have, the kinds of products or services they offer, and the level of customer service they provide. Customer service – or lack thereof – has a substantial impact on a fire safety company’s performance and profitability and should be carefully considered when investors weigh up prospective targets.
Special considerations
To make a success of your fire safety business acquisition, you need to do your research and develop a nuanced understanding of the legislation and the unique drivers of growth and profitability within this market.
In terms of accreditations, any company you’re considering purchasing needs to have a British Approvals for Fire Equipment certification at the very least. You also need to scrutinise the certifications and level of expertise of the company’s technicians, as their skills and experience will have a direct bearing on how profitable the business is.
An efficient and value-generating company will also have a robust management team in place and take advantage of the latest technology and solutions – not just concerning the products or services it provides, but in terms of optimising operations across the entire business.
How to buy a business
For investors new to the acquisition process, we’re going to provide a brief but insightful breakdown of the transaction from start to finish. That way, you’ll know exactly what to expect at every stage!
1. Choosing the ideal fire safety company to buy
During the initial phase of your M&A strategy, you will be settling on your preferred prospect profile and then researching the different businesses within that niche to find targets that seem best suited to your needs. Whether you are keen to invest in active, passive, or organisational fire safety solutions, this is the time to settle on your strategy.
For instance, perhaps you want to buy just one or two bolt-on businesses – or maybe you are keen to embark on consolidation, purchasing several smaller companies and uniting them under one fire safety umbrella.
To help you source and verify the most suitable targets, it may be worth your while to hire a business broker. Business brokers have access to a varied and extensive network of contacts, making them perfectly placed to help you locate fire safety businesses within your budget. What’s more, a business broker can orchestrate the entire acquisition process on your behalf, leaving you free to concentrate on the completed deal.
2. Get your target valued
Once you have a few intriguing prospects lined up, it’s time to ask for a valuation or to have one done for you. Again, a business broker can take care of this, using their expertise to carry out an accurate valuation of your proposed targets.
Why is this step so important? Well, one of the most common mistakes made during the M&A process is overpaying for a business – an oversight we’re sure you’re keen to avoid!
By having a thorough and accurate valuation carried out, you can avoid making this simple but critical mistake and ensure you’re paying a fair market price for the target you want to acquire.
3. Negotiating initial terms
Following the valuation of your target – or targets – it’s time to move on to negotiations so you can create a heads of terms agreement for your proposed deal. This document confirms, in writing, the key terms of the acquisition and the obligations of both you and your seller. It will also lay out a timeline for the deal’s progression.
In most cases, this agreement will not be legally binding as it will be designated as ‘subject to contract’. However, by negotiating the initial terms set out in the agreement, you and your seller will be well-placed to continue to the next stage of the acquisition process and, eventually, completion.
4. Due diligence
Now that you have hammered out the key obligations and timeline of your deal, it’s time to progress to due diligence.
This stage of the M&A process has the potential to make or break your deal, as you will be able to get an in-depth look at the operations of the fire safety business you’re planning to buy. In short, it’s the moment of truth, as you will be able to get an accurate look at every aspect of the company, from its profit and loss statements and financial projections through to its licenses, accreditations, insurance policies and customer contracts.
Poring over this vital information will help you make an informed decision about purchasing the business. However, it also gives you the opportunity to discover hidden obstacles and liabilities and potentially back out if necessary.
While it can be tempting to rush through this part of the acquisition process, it’s important to take your time, as you could miss something crucial in your haste to reach completion.
5. Finalising your acquisition
If the due diligence process goes smoothly and you are satisfied with how your target operates and its prospects for the future, then it’s time for your legal team to prepare and finalise the contracts.
Once that’s done, all you need to do is sign on the dotted line, and your investment in the resilient and growing fire safety sector will begin.
Why hire a business broker
To simplify and streamline the acquisition process, you may want to hire a business broker to manage the entire transaction.
There are several significant benefits to using a business broker, not least their extensive and nuanced expertise. Right from the beginning, business brokers can help you identify potential synergies and draw on their extensive network of contacts to find fire safety businesses that would be most suitable for your requirements.
Not only that, but a business broker can also mediate between you and the seller, providing invaluable assistance and guidance during the negotiation and due diligence stages. With their help, you and your seller can hopefully proceed all the way to deal completion with minimal stress.
Harris Acquire, at your service
Here at Harris Acquire, we have years of experience uniting buyers and sellers and unlocking value-boosting synergies.
If you’re keen to invest in the fire safety sector, we can help you find businesses to purchase that will enhance your portfolio. We’ll also take you through the whole M&A process, saving you time and hassle, and placing you firmly on the path to successful deal completion.
To find out more about our services – such as our Acquisition Finder pilot, which comes with a 30-day money-back guarantee – give us a call on 01926 757100 or email Hello@harrisacquire.com and a member of our team will be in touch!
