Securitas Systems buys again

The acquisition team at Securitas Systems has been busy, that's for sure. Click on the Securitas Systems label below for the full story, but here they go again. This time, it's a buy in the Netherlands, Installerende Partners, and it's a relatively small one. However, not only did they announce their traditional 5-7x EBITDA range, they also supplied sales numbers: approximately MSEK 26 (MEUR 2.8). Must be nice making buys in MSEK instead of the rapidly falling dollar. Anyway, now I can try some math. Securitas Systems has said they look for businesses approaching 40 percent of gross revenues in service money, but that's unlikely to be the case with a small integrator with only 25 employees, so it's probably more like 25 percent in service. That's going to bring their gross margin down into the 20 percent range, no? (I'm trying out relatively newly acquired business-analysis knowledge here, so please correct me with the comment button below if I'm way off. Remember, I was an English major...) So, of their $4 million in 2006 revenues, that's $800,000 in gross margin. As a company 20 years in business, it probably doesn't have a lot of financing costs or undue overhead, so we'll back out maybe $100,000 of that and say they've got EBITDA of $500,000. Multiply that by six and you've got $3 million as a purchase price, which is .75x 2006 revenues. If they have 25 percent of revenues in service, that's $1 million annually, which is $83,333,333 in RMR. So $3 million as a purchase price would be 36x RMR. What do people think of that?