EBITDA multiples for motor oil/lube distribution business.

July 21, 2021

by a professional from Georgia Institute of Technology in Atlanta, GA, United States

Does anyone know what is the current trending multiples for motor oil/lube distribution company that does $700,000 of EBITDA on $6,000,000 of Revenue? Thank you

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Reply by a searcher
from University of California, Santa Barbara in Los Angeles, CA, USA

That's a very specific ask but generally, distribution business don't have much differentiation and are smaller than their stated revenues since the goods they distribute pass through Revenue and COGS. So you may have a tiny business with thin overhead but high margin on your hands. There is good and bad with that. Also, I would look at any CapEx costs in case you own vehicles. You need to subtract out the cost of refreshing your CapEx from the EBITDA to get a true proxy for cash flow. So while only an opinion, I generally knock one turn off these businesses from the market standard to compensate for the limited differentiation and thin staffing.

Reply by a professional
from Oregon State University in Kuna, ID, USA

Check out BVR's DealStats database. We have a lot of auto maintenance transactions in the database. I did a broad search and it looks like 3-4x MVIC/EBITDA. I didn't remove any outliers or use any filters. Let me know if you have any questions or would like to learn more about DealStats and BVR data. https://www.bvresources.com/products/dealstats

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