EBITDA Multiples for Ad Agencies

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by a searcher from University of Florida
in Jacksonville, FL, USA

1yr ago

EBITDA Multiples for Ad Agencies

Hi All - anyone have an idea of what EBITDA multiples I should be considering when looking at buying an ad agency? One of the targets has EBITDA of $1 million and the other has EBITDA of $4 million. I'm thinking 2-3x for the smaller 1 and maybe 4-5x for the larger one....Finding comps is tough. Thanks for any thoughts you can give.

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reply by a searcher 1yr ago
from Baruch College in Tampa, FL, USA

For ad agencies, smaller ones with around $1 million in EBITDA typically go for 4.7x to 5.6x, while the bigger ones with $4 million EBITDA might sell for 6.4x to 7.7x. It's all about their growth and client list.

reply by a searcher 1yr ago
from University of North Carolina at Chapel Hill in Austin, TX, USA

Hi Karsten- happy to chat as an ex-CMO working with both digital and offline marketing agencies. Definitely agree on the comment about client list, but would still later service offering (i.e. media they specialize in) and client verticals onto any kind of valuation multiple. Happy to chat more on the topic if you want to pick a marketer's brain.