Ed Weeks Jr. explains why two $2 million EBITDA businesses sell for $8 million and $14 million. The gap comes down to EBITDA multiples, which vary by company size: 5.7× for $10-25M firms, 7.6× for $25-50M, and over 9× for larger ones. Headline multiples around 7× don't apply to smaller companies.
This week, same EBITDA, different price. Two companies each make $2 million of EBITDA. One sells for $8 million. The other sells for $14 million. Same profit, $6 million apart. That's an illustration, but a gap like that is common, and I want to show you where it comes from. I'm Ed Weeks Jr. with Weeks Consulting Group. I work with owners of established companies on growth, financing, and. And exit decisions. Let's talk about what actually sets your multiple. Start with a fair benchmark. The multiples in the headlines this year have run around 7 times EBITDA. That figure describes a market full of companies bigger than yours. Sort by size, and it changes. In Tagnify's data for the 2nd quarter, companies valued between $10 and $25 million sold at a median of about 5.7 times. Between 25 and 50 million, about 7.6. Above 50 million, more than 9. Buyer type matters too. For add-ons with 2 to 5 million of EBITDA, private equity paid a median of about 6.5 times, and corporate buyers about 6. In the trades, private equity did more HVAC deals in the first half of this year than in all of last year, according to PitchBook. GF Data's advice to sellers this quarter sums it up: Benchmark to your size range and your buyer type, not to the headlines.
