EBITDA Valuation Multiples (By Industry & Size)

Private Market Valuation Multiples Overview - How Many Times EBITDA is a Business Worth?

Given our history and expertise in conducting lower middle-market transactions, we have compiled data from our transactions and the transactions of some of our colleagues on valuation multiples for companies in the lower middle-market (up to $250m in revenue).

Since this data varies greatly based on industry and business size, we split our data sets up by that information.

Additionally, we extracted data sets from the Pepperdine Private Capital Markets Report for 2022 and 2023 and also gathered comparable information from other industry research publications covering the past 18 months (Q2 2022-Q4 2023) in M&A and private equity to provide an accurate snapshot of the current marketplace.

The tables presented below offer as precise a depiction as possible of private company valuations within today’s M&A environment.

However, it is worth noting that valuation still changes on a deal-to-deal basis and the guidance provided does not take deal structure or how skilled the M&A advisors are that are bringing a company to market into account.

One of the preliminary questions business owners always ask us is “what multiple can I get for my business” While we answer this in more detail in this article, the rule of thumb for most lower middle-market business owners is that a business is worth 4 – 8 times adjusted EBITDA. 

How is the EBITDA Multiple Determined

Beyond industry and EBITDA range benchmarks, real-world valuations are part art and part science. Because of this, we built a business valuation calculator for business owners who are interested in selling to request valuation guidance from us.

While only a competitive auction can drive the highest EBITDA multiples for companies, having a business with the below attributes helps drive higher valuations:

  1. Recurring or re-occurring revenue
  2. Continuous revenue (and profit) growth
  3. Strong profit margin (which indicates differentiation)
  4. Competitive advantages such as geographic, size or patent protection
  5. Minimal customer and supplier concentration
  6. Industry desirability and limited cyclicality
  7. Desire and willingness of the leadership team to stay in place
  8. Running a competitive auction process with multiple bidders

The subsequent tables illustrate averages of EBITDA valuation multiples across industries and sizes.

As mentioned, private equity groups, family offices and strategic acquirers will look at a litany of factors to determine what EBITDA multiple they are willing to pay, not just the size and industry.

EBITDA Multiples by Industry/Sector & Size



$1M -$10M


Raincatcher’s Comments





·          The sector saw an increase in EBITDA multiples in 2023 owing largely to post-pandemic rebounds.

·          Higher multiples at above $10 million valuations reflect scale efficiencies while Valuations at the $1 million level likely faced operational risk pressures, owner reliance, and lower economies of scale, whereas mid-sized valuations benefitted from market recovery optimism.





·          The sector experienced moderate variation in multiples from 2022, driven primarily by infrastructure demand and construction technology adoption.

·          Projects showcasing innovation, sustainable pipeline, and capital efficiency, particularly in the above $10 million range, enjoyed higher valuation metrics.

Consumer Goods & Service




·          Consumer sector multiples varied, influenced by changing consumer behaviors and e-commerce adoption.

·          Higher valuations were seen in businesses successfully navigating online transition, with premium multiples for above $10 million valuations showcasing scalability.

Wholesale and Distribution




·          Multiples in this sector were influenced by logistics efficiency and e-commerce growth in 2023, with variability across different market niches.

·          Companies with robust e-commerce and logistics capabilities, especially those valued above $10 million, saw higher EBITDA multiples.

Business Services




·          Variations in EBITDA multiples reflect the sector’s heterogeneity, with specialized services seeing higher valuation metrics.

·          Mid-sized businesses, particularly those leveraging technology, observed notable valuation resilience, reflecting their adaptability and value proposition.





·          Energy sector multiples showed volatility in 2023, influenced by fluctuating oil prices and renewable energy growth.

·          Renewable energy projects, especially at higher valuations, commanded premium multiples, reflecting the sector’s long-term growth trajectory.

Healthcare and Biotech




·          EBITDA multiples increased across all valuation levels in 2023, driven by growing demand for healthcare services and biotech innovation.

·          Scalable healthcare solutions and biotech advancements account for the higher valuations of above $10 million multiples.





·          EBITDA multiples for the sector remain high, sustained by digital acceleration across industries.

·          Strong growth potentials and scalability account for the relatively higher multiples observed across all valuations.

Financial Services




·          Financial services saw stable EBITDA multiples from 2022, benefiting from digital finance growth and fintech innovations.

·          Larger firms and fintech startups achieved higher multiples, reflecting the high value placed on innovation and market disruption potential.

What is a Typical EBITDA Multiple?

A typical EBITDA multiple range of 4x to 8x is in the middle of the range for most industries in the lower middle market.

There’s no single “typical” EBITDA multiple across sizes and industries, this range can serve as a general guideline. 

For instance, a mature company in a stable industry with steady cash flow might trade at a lower EBITDA multiple (around 5x) compared to a high-growth tech startup in a disruptive market, which could command a much higher multiple (upwards of 10x).

Related Content

Interested in learning about private market valuation? We put together an educational guide on how to value a business that you may like.

What is an Attractive EBITDA Multiple?

An “attractive” EBITDA multiple depends on the context.  For a buyer, a lower multiple (indicating a lower price) is desirable.  On the other hand, a seller would prefer a higher multiple which indicates a higher valuation. Additionally, deal structure can make an offer with a high multiple less attractive than an offer with less structure but at a lower multiple.

However, attractiveness goes beyond just the number. Factors like industry trends, the company’s competitive advantage, and the overall risk profile all play a role.  For example, a 7x EBITDA multiple might be excellent for a company in a declining industry, while a 5x multiple could be underwhelming for a company in a high-growth sector.

In a nutshell, it is important to remember that there are “typical” EBITDA multiples within different industries. By comparing a company’s multiple to its peers, you can gauge if it’s trading at a premium or discount to it’s industry peers. This provides context for both buyers and sellers when aiming for an “attractive” multiple.

What Industries Have the Highest EBITDA Multiples?

Certain industries consistently show higher EBITDA multiples due to factors like better margins, higher growth rates, or lower perceived risks.

Industries such as technology, healthcare, and financial services often have higher valuation multiples

Table 2. Industries with High EBITDA Multiples


Median EBITDA Multiple

Reasons for High EBITDA

Software & Technology

8x – 12x

High recurring revenue, scalability, intangible assets


6x – 9x

Recurring revenue from subscriptions, limited competition for established brands

Consumer Staples

5x – 7x

Consistent demand for essential products, brand loyalty

What is a Good EBITDA Margin By Industry?

EBITDA margins, which measure EBITDA as a percentage of revenue, vary widely across industries as cost structures and recurring revenue vary greatly. This metric helps assess operational efficiency and profitability, providing a benchmark for comparing companies within the same sector.

Furthermore, these margins will vary from company to company as the strategy and business model may be adjusted by the entrepreneur for any number of reasons.

A good EBITDA margin for a company depends on its industry, but generally speaking investors have a high degree of interest in companies with over 20% EBITDA margin.

Industries with typically high EBITDA margins include software, due to it having a very low cost of goods sold (hosting cost in this case), And specialized service companies who have very few competitors and therefore can charge a handsome premium for their service.

Here’s a table outlining what constitutes a healthy EBITDA margin for some key sectors:

Table 3: Strong EBITDA Margin by Industry


EBITDA Margin (%)

Software & Technology

25% – 40%


15% – 25%

Consumer Staples

10% – 15%


10% – 20%


5% – 10%

This table provides a general guideline for assessing profitability. By incorporating industry margins/benchmarks into your analysis, you gain a deeper understanding of a company’s financial health and its position within its competitive landscape, causing you to make more informed investment decisions and potentially identify opportunities for outperformance.

EBITDA Multiples Vs Revenue Multiples

A Revenue multiple is a valuation metric used to assess a company’s worth relative to its total revenue. It is used in transactions to assess a company’s top-line performance and growth potential. They offer insight to how many times revenue a business is worth.

While EBITDA multiples are mostly used in transactions involving mature industries with stable and predictable cash flows with emphasis on profitability and operational efficiency, revenue multiples are mostly applied in transactions involving high-growth companies, in sectors like technology or biotech, where future growth prospects are a more significant factor than current profitability.

Revenue multiples provide a clearer picture in these cases because they focus on top-line growth, which might be more indicative of a company’s potential in rapidly evolving markets, even if the company has not yet achieved profitability or positive cash flow.


EBITDA multiples are a critical tool for evaluating the value of a business in the Private Equity and M&A industry. By understanding the factors that influence these multiples, such as industry, size, and EBITDA margin, investors can make informed decisions about the potential value of a target company.

While revenue multiples can also be useful, EBITDA multiples offer a more comprehensive view of a company’s financial health and profitability. By utilizing the EBITDA Valuation Table and the insights provided in this article, investors can better understand the value of potential investments and make strategic decisions that drive growth and success.

At Raincatcher we understand the intricacies of business valuation and leverage our expertise to help clients navigate the complexities of M&A transactions to achieve optimal outcomes.