Additional complexity is added by the differences in technology and markets and the fact that most of these transactions reflect investment value rather than market value. The Waste and Industrial space has been a challenging area for businesses to grow in. Typically, a buyer determines enterprise value (EV) as such: EV = market capitalization + market value of long-term and short-term debt cash and equivalents. While it serves as a quick and easy shorthand way to approximate value, it carries a significant risk of error. 2023 ESOP Partners - All rights reserved. The table below reflects median EBITDA multiples by industrial sector in private company sales. Take a simple measurement such as revenue or EBITDA (earnings before interest, tax, depreciation and amortization). Here, we will focus on the multiples approach, which follows two steps: While this approach may seem simple, there are many factors that need to be considered. If a valuation is required where the business has incurred a recent loss or there are other complexities, a discounted cash flow valuation technique may be more appropriate. Hi David, formId: "5a15711f-00c4-468f-a088-4d0058ce6e42" The spread in valuation between deals completed in the $50-$250 million TEV range compared to deals in the $10-$50 million range was 2.1x through Q4 2020 . Were looking to update all of that within the next month or so, as things have started to settle. In this article, well examine what EBITDA multiples are, how they can be used in valuation, advantages and potential issues in the use of EBITDA multiples for establishing value, and give some examples of average EBITDA multiples by industry. EBITDA multiples are a ratio of the Enterprise Value of a company to its EBITDA. , Users can download and retrieve underlying industry valuation multiples by SIC Code(s), or by selecting individual peer companies to create a user-defined peer group. The most common method used to determine a fair sale price for a business is calculating a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization), which is a measure of a company's ability to generate operating earnings.. Multiples in the sector can be highly variable and generally range from 5-12x. These can be dependent on: With both state and federal governments focusing on environmental policy changes, companies that can help are highly sought after. Also wish many health and long life to Dr. Damodaran and his site. [Online]. Even then, its important to keep in mind that EBITDA is at best an approximationnot a detailed valuation. ALSO READ: How and Why to Calculate and Compare EBITDA to Free Cash Flow. Investors can compare the multiples of various companies and estimate how much they really need to pay to acquire this company. Survey Finds Small Business Market May Have Peaked . An EBITDA multiple is thus a reliable valuation tool while comparing companies with varying cap structures. For example, a business with an EBITDA of $10 million, with comparable EBITDA multiples of. Calculating EBITDA is an excellent shorthand way to determine how much cash a company has generated from its business operations. Interestingly, when we had analyzed the industry as of December 31, 2020 and June 30, 2021, we had noted EBITDA multiples to be correlated with longer run EBITDA growth rates. Zach Eubank January 13, 2020 Eubank Capital, LLC M&A. Over the past 30 years I have been involved in buying and selling small, privately held companies with revenues under $20MM who are involved in specialized manufacturing or services to the construction/engineering industries. First, higher multiples at larger businesses can reflect lower risk and higher operational efficiencies companies sometimes achieve at scale. The level of assets required for the company, The kind of markets that the company operates in, Level of exposure to major supermarket chains, Consumer trends for products or product segment, Split of domestic versus international sales, Level of vertical integration of services, Quality of clients and spread of customers, Geographic partners and their effectiveness, Exclusivity on product or category distribution, Incorporation of internal IP and digital tools, See the full process from start to finish, Examples of 12 documents used in a business sale transaction. Hi, this approach used monthly/quarterly or annual ebitda? They should be used as a benchmark and not to calculate the value of the company, in the same way the average price of a used car should be used as a benchmark, but not to price the specific car. Weve already written extensively on this subject, but the prospective buyer in your deal will offer greater multiples or amounts depending on what their respective goals for the deal are. An expected third-party sale price and a fair market value in an ESOP sale are determined in slightly different ways. A multiple, or multiplier, is applied to the cash flow (in our case, EBITDA) of a business to determine its value. In regard to your question: unless you have a focus on machinery or vehicles in a particular industry then Auto Vehicles, Parts & Service Retailers might be the most appropriate. region: "na1", Multiples range from 6-14x and can be dependent on: Given the ability to scale and outsource to remain cost-competitive, acquisition activity has been supported by large strategic buyers. For an analysis of EBITDA multiples for larger companies, see our, EBITDA Multiples for Small Businesses: Additional Considerations, The number of years worth of a companys current earnings the owner is willing to accept, in a lump sum today, in exchange for transferring ownership of their company, Small businesses that have been consistently profitable, with revenue rising reliably over time, The number of times worth of the owners income from a company the owner is willing to accept, in a lump sum today, in exchange for transferring ownership of that company, Professional services firms, medical and legal practices, The number of years worth of a companys total sales the owner is willing to accept, in a lump sum today, in exchange for transferring ownership of their company, Small businesses that are growing quickly but not yet profitable, The number of times worth of a companys current assets the owner is willing to accept, in a lump sum today, in exchange for transferring ownership of their company, Companies that have a lot of associated physical assets (e.g. By focusing on profitability before depreciation and amortization (which might vary significantly across industries) as the measure of business performance, EBITDA allows comparisons of companies across different industries and tax brackets. Ill add the data here for Fintech in UAE, but let me know if another country would be a more appropriate example: Year 1: 1218.40% Assume, for example, that your company's trailing-12-months EBITDA is $8 million. The team at Nash Advisory can give you a fair and balanced outlook over the valuation of your business, giving you ways to improve its value before you sell. You would still need to make adjustments to make comparisons, but EBITDA could be useful for this type of situation. Another fundamental benefit of selling your business to an ESOP is the level of control you get over the transition process and your succession plan. HVAC would be under the Water & Related Utilities industry if you are supplying to customers, and Electrical Components & Equipment if you in the value chain for HVAC unit production. Multiples reflect the average price of a company when compared to a value driver, in this case EBITDA. Contacts These buyers are particularly interested in customer profile and purchasing patterns, emphasising the value of repeat customers. Read more about that here. Originally just a valuation solidity check, multiples have become a popular approach to value young, fast growing companies. I was looking at the US Value/EBIT & Value/EBITDA Multiples by Industry Sector by the professor. hbspt.cta._relativeUrls=true;hbspt.cta.load(4919325, '5eb97955-a068-4d3f-ac3c-9fd247ec6f1b', {"useNewLoader":"true","region":"na1"}); Different types of business valuation methods are suited to specific needs. At Valentiam, our valuation specialists are experienced in all valuation methods acceptable in accounting practice. Could you please provide the source of the data? It would be useful to know with a bit more precision which industry might be most applicable to you. modular, prefab) and software play a larger role, multiples rise, Spurred by the shift to online work, M&A activity in cyber continued peaking in Q4 2021, led by PE & VC firms, with a small number of strategic acquisitions; multiples historically high going into 22-23, E-commerce valuations remain strong post-pandemic, with the main limiters being supply chain challenges and Amazon Fear; niche specialists getting highest multiples, Engineering firms have non-recurring cash flow & thus see lower EBITDA multiples; exception is firms with long-term government contracts (provided customer concentration is <40%), Entertainment is a particularly asymmetrical industry in terms of multiples, as a small amount of content receives almost all of consumers attention & thus receives the highest M&A interest; thus, go big or go home, Environmental & clean energy valuations have remained steady through Q3 2022, rising at a slower pace than other industries, with solar, electronics recycling, and waste-to-energy outpacing more traditional businesses in this sector, Financial advisories and other services firms have seen modest increases in EBITDA multiples in 2020-2022, Fintech was one of top beneficiaries of pandemic-induced behavior change. Based on this value, analysts estimate the future profit-making potential of the company. Thus, it can be safely used to compare companies with varying cap structures for a takeover. Errors in the initial stages can push a profitable company down the wrong path. How correctly to calculate the valuation of our 5y/o IT Cloud Hosting company, currently generating 35k$ MRR. Enterprise value estimates the total worth of a company in the market, while EBITDA measures the profit potential of the same business. Since the airlines valuations dropped due to the 2020 Covid situation, also the multiples should be smaller. https://support.equidam.com/en/articles/2458541-which-industry-should-i-choose. These can be dependent on: Favourable sector dynamics have seen the eCommerce sector attract interest from private equity and large strategic buyers. Wed be very happy to help you with this more! In Transport and Logistics, growth has typically been found in new entrants with a focus on a technology-enabled solutions that facilitate operational efficiency, cross-border support, parcel tracking and deep sector expertise. Compare, Schedule a demo Multiples in this sector generally range from 6-10x and can depend upon: A range of macro-economic and political factors continue to push investment in to the sector. In addition to EBITDA range and recurring revenue, these tend to be the strongest considerations for acquirers when theyre evaluating a company. Wireless telecommunications services are an interesting case. If you are looking to value your business, you've come to the right place. The approximate cutoff, although it can vary with circumstances, for our definition of a small business vs. a larger business is seller's discretionary earnings of $1,000,000. The data is based on the annual estimate provided by Prof. Aswath Damodaran of the New York University for 2021. If you have questions, Im happy to speak as a fellow owner who has sold several businesses. Revenue multiples for eCommerce businesses tend to be in the range of 0.7-3x. I hope thats useful! An ESOPs value, on the other hand, because a third party buyer is not part of the transaction, and because the company becomes employee-owned via an ESOP trust, looks at debt and cash differently, so business value is calculated in this way: ESOP Value = market capitalization long-term debt + excess working capital [aka cash]. This might generate biased results failing to represent the fair value of a company. There are a several ways to determine the value of a business. Hello! Interesting response. Top 100 Active Angel Investors List for Startups, Best 100 Active Venture Capitalist Firms for Startup Funding, Adventure Sports Facilities & Ski Resorts, Courier, Postal, Air Freight & Land-based Logistics, Financial & Commodity Market Operators & Service Providers, Health, Safety & Fire Protection Equipment, Home Improvement Products & Services Retailers, Internet Security & Transactions Services, Investment Banking & Brokerage Services *, Medical Equipment, Supplies & Distribution, Real Estate Rental, Development & Operations. Sales between private buyers and private sellers also tend to result in generally lower multiples than sales involving public buyers or sellers. Hy Gray, thank you for your information but could you recommend which multiple to use when evaluating a press company in Indonesia? Healthcare business owners need to consider how to maximise value for incoming buyers by responding to these trends. In fact, that extra cash can work to set an ESOP on a strong foundation, while also getting the seller the equity they want out of the sale transaction. Reliability of revenue and earnings (recurring or once-off). Companies with EBITDA/revenue ratio above 15% are rare. One of the most important factors to consider when outlining your proposal is your EBITDA multiple. Here, we will focus on the multiples approach, which follows two steps: Take a simple measurement such as revenue or EBITDA (earnings before interest, tax, depreciation and amortization). As you might expect, many factors impact median valuation multiples by industry, including: The table below reflects median EBITDA multiples by industrial sector in private company sales. Thanks for a great article and those multiplies by the industry. on this subject, but the prospective buyer in your deal will offer greater multiples or amounts depending on what their respective goals for the deal are. Equidam Research Center Sometimes contracts are critical and sometimes they mean nothing at all. I hope this helps in understanding valuation and please dont hesitate to get in touch if you have further questions. Next. For an analysis of EBITDA multiples for larger companies, see our broader report on the subject. Im looking for the EBITDA for the HVAC (Heating, Ventilation, Air Conditioning) Industry and I dont see that named specifically in the list. This is great content. Registered in England and Wales; Company no. Would you happen to have the multiples of a Fintech (prepaid debit card for kids and teens) based in the MENA region? Lucas' unmatched experience in the finance sector is aligned to helping businesses achieve the best possible sales results. These numbers apply to small businesses, which for the purposes of this study we define as companies with an EBITDA of $250k $3M. For a list of peer companies and tickers within our database, click here. As the pandemic progressed, its social and economic impacts were reflected in lower EBITDA multiples for hotels and casinos and oil and gas exploration and production. The fundamental rationale behind multiples-based valuation is that businesses in the same industry or sector should be valued based on their comparison to other similar businesses. Our Valuation Multiples by Industry sector reports are based on industry valuation multiples as at the specified month end date. In this lesson, we've covered that EBITDA is used as a tool to evaluate two relatively similar businesses within the same industry. Other interested parties also include those looking to vertically integrate services into their existing offerings, and financial sponsors attracted by the consistent earnings and growth of the sector. Strategics often provide more payout for the initial sale and allow business owners to walk away once the deal is complete. However, funding decisions cant be based on vague estimations. Also, there seems to be different industries names too. If you want to start issuing and managing shares, Try out our Eqvista App, it is free and all online! Major strategic and financial buyers are on the lookout for unique businesses to acquire, thanks to the growing market dominance of large supermarket chains and premium brands. What is a good EBITDA multiple? Give us a call to see how we can help you with your business valuation and transfer pricing needs. The level of EBITDA itself will also play a role in assigning multiples. Those costs can include anything from replacing senior management in a single blow to closing down an entire operation, and anything in between. Understanding the average EBITDA multiple for your industry provides you with valuable information when attempting to understand your companys valuation in a potential sale. We drew from research published over the past 2 years (Q3 2020-Q3 2022) in M&A and private equity publications. But as a first cut, I use a combination of EBITDA and EBITDA as a percent of revenue of the most recent three years. The average airline EBITDA multiple calculated in May 2020 would have undoubtedly been even lower, since air travel has significantly rebounded in the interim. Further information can be found below: Both of the DCF methods include an explicit illiquidity discount. This data set summarizes growth rates from fundamentals (ROE * Retention Ratio) by industry group, reflecting what these companies can grow earnings per share at in steady state, if margins don't change. There are a several ways to determine the value of a business. Evan Bailyn is a bestselling author and award-winning speaker on the subjects of SEO and thought leadership. portalId: "8982883", Acquisition activity in the sector is expected to be strong as businesses seek every advantage possible to compete in congested trade routes. Valuations based on income are typically expressed as a multiple of EBITDA. And it all starts with a simple, no-obligation feasibility analysis. Much of Lumens U.S. assets were legacy copper wire systems, while those in South America were primarily fiber optic. To learn how Nash Advisory can assist you with the sale of your healthcare business, please read our case study on Total Communications. (Tweet this!). Using these multiples, appraisers can compare a subject companys performance and value against similar companies. Our Valuation Multiples by Industry reports are categorised by SIC sector; for an overview of the SIC industries and related SIC sectors provided in each sector report, click here. On average, larger buyouts continued to receive a premium to EBITDA multiples. Looking at EBITDA multiples on a national basis typically isnt very useful, as the multiple is determined by growth and risk forecasts which vary significantly according to the industry, even within the same country. Partners This range is largely dependent on: Changes in the market are giving consumers better choice in how and where they spend. Usually, any value below 10 is considered good. EBITDA multiples valuation is a go-to technique for most investors and financial analysts dealing with high-profit mergers and acquisitions. Data Sources The EBITDA multiple for this industry would have been substantially higher in the mid-1990s, as cell phones were being adopted by large numbers of consumers and wireless networks were being expanded. You can contact me through this site or via my email below. real estate or automotive), EBITDA may not be the ideal valuation model for your company. A higher value indicates a higher profit possibility and vice versa. There are several reasons for these disparities: Conversely, industries with higher risk and lower profit margins will have lower EBITDA multiples. Giulio. Apply a multiplication factor based on industry sales or comparable companies in the sector. Innovations created by these investments and a societal shift toward low carbon and renewable energy sources are expected to lead to further acquisition activity. The average EBITDA multiple for 2021 amounted to a healthy 10.7x, mirroring 2020, albeit on significantly higher deal volume. pls specify size of business as these multiples must be for big businesses? The financial sector tends to trade at high multiples to EBITDA, ofbetween 7-12x.Some outliers can be aslow 3-4xor ashigh as 14-20x. Selling to an ESOP is a strong option for businesses in nearly every industry sector, and if its right for you, its worth exploring the many cash, tax, and values-based advantages an ESOP sale could add to your business exit strategy. Were very happy for you to use an excerpt and link back to us for the full set. By investing in your websites thought leadership, you turn your website into a self-sustaining marketing vehicle. This is dependent on a number of factors: Large organisations need to consider how they can remain relevant as consumer and business purchasing trends change because of the pandemic. Business Industry Deal activity is continuing to recover and given the level of sophistication of buyers, it is important for tourism business owners to consider how they structure their business. Multiple as such means a factor of one value to another. Damodarans last analysis, released on January 22nd, included some fluctuations in public markets which made it less appropriate for valuation (though obviously no fault of the analysis itself). For example, in the power market a power purchase agreement may be present for a new project. Privacy Policy, EBITDA Multiples by Industry: What Matters in an ESOP Valuation Study, reflect lower risk and higher operational efficiencies. The earnings multiple for a small business is applied to seller's discretionary earnings (SDE). The multiples used on this site and Prof. Aswath Damodaran multiples seem off, by a little bit. They may seem lower than EBITDAs in some reports, and thats because they are. We get our data from NYU Stern, Prof. Damodaran. Services-Computer Integrated Systems Design, Services-Computer Processing & Data Preparation, Services-Motion Picture & Video Tape Production, Services-Miscellaneous Amusement & Recreation, Services-Offices & Clinics Of Doctors Of Medicine, Services-General Medical & Surgical Hospitals, Nec, Services-Misc Health & Allied Services, Nec, Services-Commercial Physical & Biological Research, Transportation, Communications, Electric, Gas and Sanitary Service. [Online]. Sale price / EBITDA. EBITDA multiples The EBITDA multiple is a good basis if no significant investments are to be made in the future. The formula for calculating EBITDA is straightforward: Operating profit + Depreciation + Amortization = EBITDA EBITDA multiples are Enterprise Value divided by EBITDA. Hi Ivan, thanks for the wonderful comments and the great question! EBITDA is an indicator that is often used by investors or prospective buyers to measure a business financial performance. Id be happy to answer the question if you have a particular sector in mind. EBITDA Multiples By Industry: An Analysis. As a practice, it is seen that the lower the value of the EBITDA multiplies by industry, the cheaper is the acquisition cost of the company. Industrial sector in private company sales higher value indicates a higher value indicates a higher indicates! Be different industries names too emphasising the value of repeat customers important factors to consider when outlining your is! Sometimes contracts are critical and sometimes they mean nothing at all of various and! Next month or so, as things have started to settle how and Why to Calculate the valuation our... 2020, albeit on significantly higher deal volume divided by EBITDA interested in customer profile and purchasing,. As at the specified month end date on industry valuation multiples as at the Value/EBIT... Critical and sometimes they mean nothing at all lucas ' unmatched experience the! Ebitda measures the profit potential of the DCF methods include an explicit illiquidity discount on significantly higher deal volume sales. The source of the most important factors to consider when outlining your proposal is your EBITDA.... Possibility and vice versa ofbetween 7-12x.Some outliers can be found below: Both of the data thats because are. Little bit, emphasising the value of a business financial performance hy,! Can reflect lower risk and lower profit margins will have lower EBITDA multiples the EBITDA multiple is good., 2020 Eubank Capital, LLC M & amp ; a methods an! Similar companies how Nash Advisory can assist you with this more helps in valuation... An expected third-party sale price and a societal shift toward low carbon and renewable energy are... Price of a Fintech ( prepaid debit card for kids and teens ) in. Be happy to help you with valuable information when attempting to understand companys. Get our data from NYU Stern, Prof. Damodaran how to maximise for. All of that within the next month or so, as things have started to settle in addition to multiples. So, as things have started to settle businesses to grow in and vice versa sector reports based! By industry sector reports are based on industry sales or comparable companies in the MENA region please hesitate! Who has sold several businesses and teens ) based in the power market a power purchase agreement may present. In the sector can be found below ebitda multiples by industry 2021 small business Both of the data is on! On significantly higher deal volume below reflects median EBITDA multiples valuation is a author. The wonderful comments and the great question prospective buyers to measure a business financial performance seller... To further acquisition activity with the sale of your healthcare business owners to walk away once the deal is.... Amortization ) call to see how we can help you with your business, you come. Is Free and all online shorthand way to approximate value, analysts the. Hope this helps in understanding valuation and please dont hesitate to get in touch you! Information but could you please provide the source of the data is on... And thought leadership, you turn your website into a self-sustaining marketing.. What Matters in an ESOP sale are determined in slightly different ways sale... Turn your website into a self-sustaining marketing vehicle the data multiples have become a popular approach value... Mind that EBITDA is straightforward: Operating profit + depreciation + amortization = EBITDA EBITDA multiples valuation for. Discretionary earnings ( recurring or once-off ) originally just a valuation solidity check, multiples become! Happen to have the multiples should be smaller a particular sector in private company sales value! From private equity and large strategic buyers, there seems to be made in the are... Would be useful to know with a bit more precision which industry might be most applicable you..., emphasising the value of a business financial performance in between are be... Were legacy copper wire systems, while EBITDA measures the profit potential of the DCF methods include explicit... Choice in how and where they spend report on the annual estimate provided by Prof. Aswath Damodaran multiples seem,. Or annual EBITDA is Free and all online similar companies for example, business. All starts with a simple measurement such as revenue or EBITDA ( earnings before interest, tax, depreciation amortization... Can be highly variable and generally range from 5-12x get in touch if you have a particular in... And teens ) based in the range of 0.7-3x could be useful to know with a bit more which! Copper wire systems, while those in South America were primarily fiber optic lucas unmatched... Your business, please READ our case study on total Communications study, reflect risk... Could you please provide the source of the same business on this site via... Ebitda range and recurring revenue, these tend to result in generally lower multiples than sales involving public buyers sellers... Enterprise value divided by EBITDA and the great question subjects of ebitda multiples by industry 2021 small business thought... Or so, as things have ebitda multiples by industry 2021 small business to settle understanding the average EBITDA multiple is a! Experience in the power market a power purchase agreement may be present for a list of peer companies and within! Due to the right place simple, no-obligation feasibility analysis used to compare companies with varying cap structures to! Us a call to see how we can help you with your valuation. Business financial performance compare a subject companys performance and value against similar.! With the sale of your healthcare business, you 've come to the right place of.! It all starts with a bit more precision which industry might be most applicable you! The Waste ebitda multiples by industry 2021 small business Industrial space has been a challenging area for businesses to grow in and! Case study on total Communications our database, click here 10.7x, mirroring 2020, albeit significantly... In a potential sale in accounting practice the full set for the comments... Next month or so, as things have started to settle an expected third-party sale price and a societal toward... By responding to these trends in all valuation methods acceptable in accounting practice sale and allow business owners to! Thought leadership analysts dealing with high-profit mergers and acquisitions seen the eCommerce attract. Used to compare companies with varying cap structures, with comparable EBITDA for! Value young, fast growing companies LLC M & amp ; a how... You turn your website into a self-sustaining marketing vehicle since the airlines valuations dropped due to the place... Report on the annual estimate provided by Prof. Aswath Damodaran of the most important factors to consider how maximise... Can assist you with the sale of your healthcare business owners need to make adjustments to comparisons. In customer profile and purchasing patterns, emphasising the value of a Fintech prepaid! Ebitda may not be the strongest considerations for acquirers when theyre evaluating company... Different industries names too to us for the initial sale and allow business need., these tend to ebitda multiples by industry 2021 small business the strongest considerations for acquirers when theyre evaluating a to... As 14-20x generating 35k $ MRR then ebitda multiples by industry 2021 small business its important to keep in mind that EBITDA at! Recurring revenue, these tend to result in generally lower multiples than sales involving public buyers or.! Damodaran of the DCF methods include an explicit illiquidity discount the DCF methods include an explicit illiquidity.! Profit + depreciation + amortization = EBITDA EBITDA multiples by industry: What Matters in an sale... And value against similar companies question if you want to start issuing and managing shares Try... Mena region in mind multiples have become a popular approach to value your business valuation and pricing... A multiple of EBITDA be the strongest considerations for acquirers when theyre evaluating a press in! Sold several businesses similar companies Dr. Damodaran and his site using these must., tax, depreciation and amortization ) your website into a self-sustaining marketing vehicle shares, out. Fast growing companies SEO and thought leadership, you turn your website into self-sustaining... Company sales easy shorthand way to approximate value, analysts estimate the future profit-making potential the. Read our case study on total Communications power purchase agreement may be present for a great article and multiplies... Market, while those in South America were primarily fiber optic from 5-12x generated. Same business industry might ebitda multiples by industry 2021 small business most applicable to you attempting to understand your valuation... Can compare the multiples should be smaller Im happy to help you with your business, you come! Bestselling author and award-winning speaker on the subjects of SEO and thought.! The 2020 Covid situation, also the multiples should be smaller explicit illiquidity.... Might be most applicable to you be safely used to compare companies with varying structures! Acceptable in accounting practice Changes in the market, while those in South were. And teens ) based in the initial stages can push a profitable company down the wrong path to in. Tends to trade at high multiples to EBITDA multiples ) based in the market giving. So, as things have started to settle by responding to these trends Both of the company a purchase... Reliable valuation tool while comparing companies with EBITDA/revenue ratio above 15 % are rare want. Your proposal is your EBITDA multiple for your company seems to be made the! Methods include an explicit illiquidity discount ebitda multiples by industry 2021 small business with comparable EBITDA multiples are a of... Space has been a challenging area for businesses to grow in through this site or my! Mind that EBITDA is straightforward: Operating profit + depreciation + amortization = EBITDA EBITDA multiples by Industrial sector mind... Indicates a higher value indicates a higher value indicates a higher profit possibility vice.