Keeping People and Buildings Safe – and Investors Interested: Why Fire & Safety Is Heating Up

Key trends shaping the industry

For owners and leaders in the sector, this blog explores the key trends shaping the industry, the opportunities emerging and why the business model is well-positioned for growth, scalability, and private equity involvement.

High degree of fragmentation

• The UK fire services market is categorised by a high degree of fragmentation, with the top five providers in the market estimated to have a c.20% share. The remainder is serviced by a group of (increasingly private equity-backed) mid-tier players and a highly populated suite of smaller (predominantly owner-managed and regionally focused) businesses. There are c.2,000 BAFE-accredited providers in the UK market alone.
• This high degree of fragmentation lends itself to buy and build / consolidation initiatives as larger groups, which are increasingly backed by private equity, look to build platforms of scale.

Mission-critical nature of spend and nature of contracts underpins strong revenue visibility

• Fire safety assets have the potential to provide recurring revenues and stable cash flows, due to regulatory-mandated maintenance / inspection cycles, with these “maintenance” services typically procured in the form of multiyear and inflation-linked contracts.
• While the proportion of recurring revenue as a percentage of the total revenue opportunity varies depending on the fire safety asset in question, there is still scope for repeatability across projects / installation-based works.
• This is due to the mission-criticality of these services (underpinned by legislation, health and safety, insurance and general commercial best practice), and the extent of the non-compliant backlog which requires clients to set aside sizeable capital budgets to address these.

Regulatory underpin

• The Grenfell Fire has rightly led to a tightening of existing regulation (e.g. 2010 Building Regulations: Approved Document B), and the introduction of new legislation including the Building Safety Act 2022, the Fire Safety Act 2021 and the Fire Safety (England) Regulations 2022.
• These regulations have placed a greater compliance burden on building owners in the form of greater scrutiny and heightened standards, increased responsibility and penalties, more frequent surveys and inspections, and a broader scope of buildings falling under the regulatory remit.
• Enhanced regulatory stringency is a core driver for historical and forecast growth (2025F-2030F: 10%+ CAGR) in the fire services market and has enabled several providers in the market to benefit from strong organic growth.
• It has also driven a further shift towards the use of specialists, and away from generalists or in-house procurement teams, as clients look to better manage risk.

Barriers to entry

• It is possible for providers of scale to build competitive market positions through accreditations, technical expertise, sector credentials, depth and breadth of delivery (which can include well-resourced self-delivery teams and well-managed and flexible subcontractor supply chains depending on the business model), and quality of service.

Multiple avenues for growth

• Investors are attracted to the broad range of organic and M&A-led growth initiatives available in the market, whether that be expanding a core service across multiple regions or sectors, or building more diversified groups through the bundling of adjacent services (with examples including but not limited to – active fire and passive fire, active fire and security, fire detection and suppression, fire with electrical, water or air, and remediation with surveying capabilities).
• There is a growing trend of internationalisation across segments of the market, with notable multinational providers (e.g. Chubb, BST Group) being joined by several others who are looking to expand their coverage across borders.
  
  

What does “good” look like for private equity investors assessing the space?

Growth – organic and M&A

• Organic growth is a key consideration, even for businesses that have grown sizeably through buy and build. Organic growth rates typically vary depending on underlying service line mix, though several recent businesses have transacted with 10%+ organic growth % p.a.
• Organic growth is also assessed from a sustainability perspective, as investors look to determine the extent to which this is driven by the broader market uptick, versus business-specific competitive differentiation.
• M&A-led growth will be assessed by the cleanliness of integration, the degree of discipline with bolt-on pricing, and the extent of synergy realisation (where relevant), post-acquisition. For businesses that have had a limited M&A track record, investors will assess the infrastructure in place to support any future acquisitions.
• Businesses that have combined healthy organic growth with a successful track record of acquisitions are particularly highly regarded.

Margin performance and cash conversion

• Similar to growth, margin will be assessed by investors from a sustainability perspective, and it will in part be influenced by service line mix.
• Investors are typically looking for operating margin profiles above 10%, which in addition to reflecting the nature of the specific systems serviced, also take into account a business’ contract management discipline, sector footprint, tech enablement and efficiency of delivery model deployment (whether that be in the form of largely self-delivered capabilities or subcontractor management).
• Free cash flow conversion in the context of growth will also be assessed, with some leeway given to businesses that have achieved outsized growth in recent years, though ultimately cash generative (operating cash conversion of 70%+) and capex light business models are preferred.

Revenue visibility and mix

• There has been strong interest in and competition for businesses with contractually or behaviourally recurring and / or compliance-led business models (representing over 50% of revenue), whose turnovers are typically derived from multiyear contracts. The renewal rates on these contracts will also be a key assessment factor.
• That said, strong interest remains for projects-based businesses that can prove revenue visibility through orderbook and weighted pipeline coverage, and consistency of projects, aided by preferred supplier relationships or small-value, high-volume type works.

Customers and sectors

• High customer concentration (e.g. 30%+ of revenue coming from a single client) serves as a valuation drag, as does less entrenched / tenured customer books.
• Investors will look to get comfortable with end-market specific growth dynamics, though previous processes have demonstrated strong appetite for a number of verticals, including but not limited to high-risk sectors (e.g. social housing, healthcare, education and student accommodation), which require a high degree of remedial spend, as well as ones with complex environments (e.g. data centres).

Management teams and people

• Investors will be looking for well-invested senior and secondary management teams, with limited “key-person risk” from a client relationships and operational point-of-view, strong experience (including in M&A) and futureproofing (from a succession perspective).
• In a market that has experienced workforce shortages across the value chain, proving the ability to maintain healthy engineer / operative retention rates (70%+ p.a.) and subcontractor supply chain liquidity will be important, to support future growth.

TIS – Building a platform for growth in fire & safety

In 2021, Key Capital Partners invested in TIS, a market-leading independent life safety, security and communications systems integrator.

We recognised the strength of the business, the ambition of its senior leadership, and the significant opportunity to accelerate its growth in a rapidly expanding and increasingly regulated market.

From the outset, our focus was on supporting TIS to scale effectively – strengthening its leadership, deepening its capabilities and positioning it to capture the opportunities ahead.

Together with the TIS team, we:

• Strengthened leadership by recruiting a high-calibre Finance Director and creating a new Sales role to sharpen the company’s commercial and client focus.
• Enhanced board expertise by appointing Guy Other as Chair, bringing deep sector knowledge and a proven record of guiding ambitious businesses through transformational growth.
• Invested in people and future skills, supporting TIS in launching two in-house academies – one for multi-skilled engineers and one for the design team. These academies represent a significant commitment to developing young talent and ensuring the business has the skills base needed to sustain long-term expansion.
• Supported strategic expansion through the acquisition of Nationwide Specialist Projects (NSP), a smoke control specialist. The deal was sourced through our network and executed alongside the management team to broaden TIS’s fire safety offering and deepen its technical capability.

Today, TIS continues to thrive as a leading force in the fire and safety sector – combining a strong service-led culture with an ambitious growth strategy. Our partnership reflects what we do best at Key: backing exceptional management teams, adding strategic value, and helping to build businesses that lead their markets.

Conclusion

The opportunity for investment in this sector is undeniable. Well-positioned service providers are ideally placed to capitalise on the powerful regulatory and technological forces driving sustained market growth. The UK’s ongoing focus on building safety and housing development continues to create strong, recurring demand for experienced, compliant operators. With the right foundations – long-term contracts, robust governance, and operational excellence – businesses in this market can scale rapidly, expand their service offering, and deliver exceptional returns. For investors and management teams alike, this is a sector where capability, credibility, and timing can deliver real value.

At Key Capital Partners, we continue to actively back businesses in this area – bringing investment, strategic insight, and experience to help ambitious management teams unlock their next stage of growth.

We’d like to thank the Deloitte LLP Business Services M&A Advisory team for their valuable contribution and adviser insight into why Fire and Safety is attracting strong investor interest, and for helping us understand the full picture of opportunities in this evolving sector.

Sources

• GOV.UK – Fire prevention and protection statistics, England, year ending March 2025.
• GOV.UK – Building Safety Remediation: monthly data release (August 2025) (management tables / remediation dashboard).