Everything I have read about ETA suggests excessive customer concentration is a red flag and these businesses should be discounted. My search for B2B construction service businesses like facilities management, HVAC, scaffolding, engineers, window/roof installers etc has faced the reoccuring problem of customer concentration. Many companies either act as subcontractors for a handfull of larger companies or become the reliable service provider for a small number of customers. It is common to see one customer providing 40-50% of revenue and the top three accounting for 80%. In some circumstances there are no long-term contracts and the relationship is based on service. The businesses are well established and tend to have adjusted EBITDAs of £400k to £1m. Brokers are suggesting these business should command multiples of 4-5x, which in my mind doesn't reflect the associated risk. However, these businesses must have a value and I would welcome any thoughts on whether 2-3x could be worth the risk. I have been discussing one such business with a broker and believe a deal could be agreed whereby I pay 1.5x on completion and 1x after 12 months assuming the key customers haven't been lost.