Food Manufacturing Comps & EBITDA Multiples

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August 02, 2024

by a searcher from University of Virginia-Darden - Darden School of Business in La Jolla Shores Beach, San Diego, CA 92037, USA

I'm pursuing an acquisition of a food manufacturing company with roughly $3 million in EBITDA and am looking for comps and ultimately trying to determine on appropriate EBITDA multiple. Does anyone know of any good resources for determining an appropriate multiple for this type of business, particularly given its size. This business is doing approximately $17mm in revenue. Thanks, Kenny

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from Emory University in Tucson, AZ, USA
Agree with Peter, start with BVR. When we review businesses in this category, we look at the typical factors of any company. Additionally, we consider elements such as whether the business operates under private label versus branded products, the distribution channels it utilizes, and the retailer mix if applicable. It’s also important to assess the SKU and margin mix, and whether promotional pricing strategies like case rebates are distorting volume. Another critical aspect is evaluating margin and growth in the context of ingredient inflation distortion.
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from University of Illinois at Urbana in Los Angeles, CA, USA
Hi Kenny, there can be a lot of nuances in food manufacturing multiples. 5-9x is probably a good range for most companies. Factors can include type of product, distribution method, branding, customers, margins, etc.
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