Valuation Benchmarks for a $2M EBITDA CPG

February 20, 2026

by a searcher from Oregon State University in San Francisco, CA, USA

Hi everyone, I’m currently looking at a CPG target and wanted to get a quick "sanity check" from the community on valuation expectations. The Profile: EBITDA: ~$1.7M - $2M range. Margins: Strong 25%+ EBITDA margin (Asset-light). Concentration: One major retailer >80% of revenue Given the high margins but the heavy customer concentration, what's a realistic multiple range in the current market? Are you seeing deals like this close at 4x-5x? Any insights from those active in the CPG space would be greatly appreciated. Thanks!

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Reply by a searcher
from Emory University in Tucson, AZ, USA

Given the concentration with a single retailer accounting for 80% of sales, this can go south quickly, especially with an asset light CPG: buyer change, category changes, retailer distress, resourcing to a new vendor or private labeling, trend and consumer change, etc. There may also be a quiet signal underlying the product that it doesn’t perform outside of this core retailer thus expansion isn’t feasible - or that you might be punished for doing so by your key retailer. People outside of CPG often underestimate the complexity of generating growth through new retailers and channels - basically if the company hasn’t been able to do it, why would a new operator be any different? The concentration risks also poses challenges to financing, whether acquisition or line of credit for day to day needs. You’d want to incorporate credit insurance to mitigate risk of the retailer’s default but that brings expense. All this to say we would not go through a valuation exercise but we are also conservative. If we entertained even a ballpark, it would definitely not be a 4-5x multiple.

Reply by an intermediary
from University of Western Australia in London, UK

Broadly speaking yes, this is not an unreasonable multiple for a great business in this sector. However, structure matters (i.e. how much is in cash, how much deferred, etc). And there is a lot that goes into determining whether this is a "great" business (and worth this multiple), beyond what you've described above. I wouldn't be alarmed by the strong margins, they are a good thing. We've seen CPG businesses maintain >25% net margins at 10x this scale (not that this is the norm of course). The devil is in the detail. We are specialists in this area. Happy to help if you want advice.

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