7x businesses that are $15m EBITDA

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November 01, 2023

by a searcher from Massachusetts Institute of Technology in New York, NY, USA

Hello,

I was going through a mental exercise and I was curious to gauge the community’s thoughts. I know sub-$5m companies would go for 5-7x EBITDA. I’m curious to hear people’s thoughts on industries (with companies greater than $15m EBITDA) that are valued at 6-9x EBITDA with good market fundamentals. What are the best industries that come to mind with those parameters?

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Reply by a searcher
in Rindge, NH 03461, USA
Your numbers are off. The national average is 2.97 multiple. Smaller companies = smaller multiples. Very few companies in sub $5M will go for 5-7x. Most of these deals are SBA funded, and with today's interest rates, they won't pass the DSCR test at much more then 4x. Bigger deals are assumed to go for higher multiples, but it is not always the case. 9X is PE territory and PE are only looking for high growth companies since the debt payments on 9x will be more then the earnings.
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Reply by a searcher
from Harvard University in Texas, USA
Numbers alone are not multiple deciders. Period. On top of that your assumptions are not industry' current standards. Redundant data.
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