Earn Out Multiple on Incremental EBITDA
May 19, 2026
by a searcher from Northwestern University - Kellogg School of Management in Chicago, IL, USA
Paying 4X on $1.3M EBITDA. Company in b2b service has $1M in signed contracts that have begun, but are not in TTM. Does it make sense to pay an additional 4X on the incremental $1M via an earn out at the end of the year? Or is that too much $ or too soon when operating new biz? Thanks.