Is a 4-6x Exit Multiple Almost Guaranteed for Middle-Market Roll-Ups?

by a searcher from Loyola College in Maryland

2 weeks ago

I’ve been exploring roll-up strategies and am curious to hear from those with direct experience in the middle market. It’s often said that if you can successfully consolidate companies and reach $10M+ in EBITDA, you can almost automatically sell for a 4-6x multiple—or higher—based on supply and demand dynamics and the sheer number of funds chasing deals in that range.
Does this align with your experience? Are there nuances or risks to watch out for when positioning a roll-up for a middle-market exit? I’d love to hear insights, particularly around what buyers are looking for in these larger acquisitions and whether the multiple is truly "guaranteed" or dependent on other factors.
Looking forward to learning from the community!

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searcher from University of Calgary - Haskayne School of Business

The idea that a 4-6x exit multiple is “almost guaranteed” for middle-market roll-ups oversimplifies a complex process. While achieving this range (and much higher) is possible, it is far from automatic and depends on several critical factors. Size, market, industry, team, integrated cohesiveness of the entities, infrastructure, financials and growth potential, competitive barriers, etc.

1 week ago | like reply | 1 like

searcher from Virginia Polytechnic Institute and State University (Virginia Tech)

$10M in EBITDA is likely worth more than that, provided you're leaving some meat on the bone for the next guys.

2 weeks ago | like reply | 0 likes

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