Multiple for larger business?

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October 07, 2020

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

Does anyone have insights into current multiples for larger businesses (~$5M EBITDA)?

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Reply by an intermediary
from University of Pennsylvania in Durham, NC, USA
As Tony indicated, the range varies widely depending on industry and company characteristics. For lower middle-market transactions, one of the best data sources is GF Data Resources. They collect data from over 200 PE firms. Their data is well-scrubbed but likely to be impacted by selection bias. According to their August report, aggregate Q2 multiples based on enterprise value ranges were:
$10 million to $25 million – 6.1x
$25 million to $50 million – 6.9x
$50 million to $100 million - 8.4x
The above information is from a press release on their website. For more details, see https://www.gfdata.com/news/articles/now-we-know-some-stuff/
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Reply by a searcher
from Texas A&M University in Johnson City, TN, USA
Reviving old thread. Subway to sell for 6.75x EBITDA @ $750M with ~50% leverage: https://www.cnbc.com/2023/05/01/subway-comes-up-with-5-billion-debt-plan-to-clinch-sale-sources-say.html

I've been learning more about deal ceiling, surprised that many companies even $5M EBITDA+ seem to still go in the 3x-5x range.

For us as buyers of much smaller entities- does this help us justify sub 4x multipliers to ourselves and the sellers we work with? I would say yes. Subway is a household name, yes with specific industry, but even they have not "strategic" exit at greater than 6.75x even at their scale and size?
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