01
Founder Dependency
Heavy owner involvement can increase transition risk. A management team that can operate without the founder gives buyers a more transferable business.
Data Intelligence Benchmarks
Private Company Valuation Multiples by Industry (2026 Benchmarks)
2026 illustrative benchmarks • Not verified transaction data • US Lower Middle-Market ($5M–$75M EV)
Key Takeaway
These illustrative examples show how industry sector, recurring revenue, and operational founder independence can shape EV/Adjusted EBITDA multiples for lower middle-market private companies. Software and tech-enabled healthcare examples sit at the upper end, while manufacturing and distribution examples sit lower. The figures below are discussion reference points—not observed transaction medians, a market survey, or a valuation of your company.
Industry EV/EBITDA Reference Points
All multiples and ranges are illustrative. Actual deal outcomes depend on company size, earnings quality, growth, buyer fit, and transaction terms.
| Industry Sector | Illustrative EV/EBITDA | Illustrative Range | Key Multiple Drivers |
|---|---|---|---|
| B2B SaaS & Enterprise Software | 12.4x | 8.5x – 18.0x | Net Revenue Retention (NRR > 110%), gross margins > 75% |
| Healthcare IT & Tech-Enabled Services | 11.2x | 8.0x – 15.5x | Regulatory compliance, long-term provider contracts, recurring revenue |
| Managed IT & Cybersecurity Services | 9.8x | 7.0x – 13.0x | Percentage of MRR/ARR, low customer churn (< 5%), tech stack scalability |
| Professional & Tech-Consulting Services | 7.6x | 5.5x – 10.5x | Scaled delivery team, low founder billable hours, repeat corporate accounts |
| Specialty Precision Manufacturing | 6.8x | 5.0x – 9.0x | Proprietary IP/tooling, clean facility audits, automated operations |
| Value-Added Logistics & Distribution | 6.2x | 4.5x – 8.5x | Exclusive supplier agreements, warehouse automation, route density |
EV = enterprise value. EBITDA = earnings before interest, taxes, depreciation, and amortization.
What Shifts Your Multiple Up or Down?
02
Customer Concentration
Reliance on a single customer can make earnings less resilient. Buyers examine account concentration, renewal history, and the durability of customer relationships.
03
Quality of Earnings & Clean Books
Reviewed financials and documented add-backs help buyers underwrite adjusted EBITDA. Unresolved accounting issues can lead to valuation discounts or renegotiated terms.
04
Contracted Recurring Revenue
Durable subscriptions and contracted revenue can improve earnings visibility. Contract terms, retention, margins, and churn matter alongside the recurring revenue percentage.
Methodology & Data Integrity Note
This page presents illustrative figures supplied for sector comparison. No supporting transaction records, closed private equity add-on data, or M&A filings have been verified for these figures. Deal sample counts are therefore not reported, and no quarterly verification or update schedule is claimed.
The intended context is US lower middle-market businesses with $5M–$75M enterprise value. Do not treat these examples as investment advice or a substitute for a company-specific valuation and current, sourced comparable transactions.
Determine Where Your Business Falls on the Multiple Curve
Put sector reference points in context with your financials, operating risks, and exit preparation.