Anyone Else Observing Multiples Tick Up?

May 16, 2025

by a searcher from Ivey Business School at Western University in Toronto, ON, Canada

Hi everyone, Excited to join the Searchfunder community. I’m a self-funded searcher based in Ontario with 20+ years of experience operating businesses in facilities management and property services. I’m currently pursuing acquisition opportunities in the lower middle market, in Canada. One thing we've noticed: valuation multiples for service-based businesses ($1.5M–$3M EBITDA) seem to be ticking up slightly compared to last year—especially for assets with recurring revenue and low capex. Curious if others are seeing the same in your searches or deals? Appreciate any insights, and I’m looking forward to connecting with fellow searchers, investors, and operators.

Reply by a searcher
from University of British Columbia in Vancouver, BC, Canada

Even warren buffet has had to move away from value investing to a market trading approach. now, acquiring only makes sense if you have a value added post transaction strategy...

Reply by a searcher
from Massachusetts Institute of Technology in Apex, NC, USA

Rates have come down slightly so there's some impact there. I think broadly, the asset class (service based) is still very competitive among searchers, LMM PE, and "strategics" of all sizes. Depending on the exact sector, PE is heavily involved and is quite aggressive with multiples to win deals and reach scale faster. There's also been some VC interest (we'll run this business with AI) and thesis around tech enabling traditionally "non-tech" businesses. Bad news is entry multiples are high, good news is if you grow business exit multiples are also high! But not sure I'd count on much multiple expansion in underwriting because of current multiples (high) and you never know what could happen.

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