Multiples by deal size and industry (for SDE and/or adj EBITDA)

searcher profile

July 12, 2024

by a searcher from The University of Chicago - Booth School of Business in Greenwich, CT, USA

Hi all,

This was probably asked before, but I'm reaching back again to this community who was extremely helpful in the past...where can I get an idea for the multiple ranges by ind and deal size, for SDE and/or adj EBIDTA (SDE adj for the FMV of an operator)

Thank you for your help.

Best

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commentor profile
Reply by a searcher
from St. Petersburg College in Tampa Bay, Florida, USA
For a self-funded searcher using an SBA loan, I've heard from others that generally you cannot finance more than about 3.75 turns of EBITDA. Anything higher than that would come from seller financing or equity injection.

I do not worry myself with multiples of specific industries, I calculate my best offer based on my own comfortable Debt Service Coverage Ratio, and if the seller accepts - great, if not - not the right fit. Generally, I shoot for 1.50 DSCR after factoring in my own salary.
commentor profile
Reply by a searcher
from University of Toronto in Toronto, ON, Canada
I have this same question. I've looked at the BVR data, but it varies so widely that it may not give you the direction that you need. In the end, you're not seeing the nuance in the BVR data, so it's hard to know which are the most comparable transactions. In the end, it seems like the multiples are much more an art than a science, and that there's no 'right' answer. I'm new to this world, but this is what I'm seeing.
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