I am evaluating a commercial HVAC business. It is reasonably decent size ($30M+ revenue, $3.5M to 4M+ EBITDA). No asking price was set. Revenue over the past 5 years is "bouncy" - up, down, up, DOWN (covid), up. No consistent growth###-###-#### revenue will be less than 2018 revenue but more than 2019 revenue.

With regards to valuation, I had an initial call with the broker to gauge the thinking. According to the broker the owner "has in his mind $25M to $30M sales price". Additionally color to their thinking: "no earn outs, seller note might be ok as long as it's short, decent interest rates and has collateral". This translates to a nearly 6X to 7X multiple on EBITDA which seems really out of market. Is anyone else seeing these types of multiples?

My spidey sense is that this owner isn't motivated to sell but is just sticking this out there to see if anyone is crazy enough to buy it at a crazy multiple. But I want to check in to see the market rates for businesses this size.