Smaller deal multiple & addbacks

October 04, 2025

by a searcher from University of Maryland at Baltimore in New York, NY, USA

I'm looking at a printing company in NY state doing ~250k SDE. Most of the SDE is lifestyle add backs (owner salary + auto, computers, meals, etc). Curious if anyone has insight into appropriate multiple in this space and also how to verify some of these add-backs.

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Reply by a searcher
from University of Pennsylvania in Dubai - United Arab Emirates

I am not sure about the multiples. With respect to the addbacks the "verification" will differ by type. In all cases you will need both the financial statements and bank statements. In all cases the add back should tie to the amounts charged to the financials and the cash outflows from the bank statement. Once you confirm they are "real" you need to think about whether these are indeed not "true business" expenses. For example are the meals client entertainment or meals when travelling for business which would not be an add back. Is there another computer that exists and the add back item is for one that is not needed for work? In terms of the owner comp, you need think about whether it is correct to add back the entire amount or just any "excess" above market.

Reply by a professional
from Roosevelt University in Beverly Hills, CA, USA

Hi there Noah, the industry multiple would likely be 1 to 2 times SDE and between###-###-#### times like Tom Tofield mentioned. With regards to add-backs, they would be legit if you indeed won't need them to run the business post acquisition. Ex. the meals, if they were used to get new clients, this is not a proper add-back. Also keep in mind when thinking about multiples the range is there because certain factors need to be in place and the transferrable value would move that multiple up or down.

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