• The market sets the price multiple, and the only true way of determining the market value of your company is to package and present your business for sale. Only real bids from the most qualified buyers will give you the true answer for what the market would pay.
Dec 19 2013 01:10 PM
• Typically, for companies with EBITDA between $1 million and $20 million, the market will pay multiples between 3.5 to 7 times EBITDA.
• The multiple changes from industry to industry.
• The larger the company, the higher the EBITDA multiple. This is due to larger companies being less vulnerable and having more consistent, predictable revenue and profit streams. Also, the supply of larger companies is smaller, so demand is higher.