Plumbing Multiples (Atlanta)

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May 22, 2024

by a searcher from Kennesaw State University - Coles College of Business in Atlanta, GA, USA

What EBITDA multiples are you seeing for plumbing? We've been in conversations with a local plumbing shop here in GA. 50/50 commercial/resi. They do ~$5.5M in revs. I see that industry average Net Margins are 15% - 20% (correct me if that's wrong). Their margins are lower due to how they like to run the business (they have some bloat).

I pulled some comps and see EBITDA multiples from###-###-#### 25x. Is that what others are seeing?

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commentor profile
Reply by an investor
from University of California, Berkeley in San Francisco Bay Area, CA, USA
I invested in a sizable plumbing company at 2.5x SDE last year. The appraisal came in around 3.5x. My observation is that there is significant valuation variance. Larger companies with $3M+ in EBITDA sometime sell for 7-10x to PE buyers and it is not unusual to see ~$250k SDE companies to go for less than 2x SDE.
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Reply by a searcher
from Simon Fraser University in Port Coquitlam, BC, Canada
Like others mentioned, DealStats is a great resource. It helped me in the past in a similar situation.

The valuation depends a lot of where the revenue is coming from. Is it service work or project work? Understand what they mean by commercial? Is it new built for small single family developers, or complex bid-build projects? A###-###-#### mix might not be the best, as residential plumbing companies operate very differently from the commercial ones.
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