PE pushing acquisition multiples from 4X EBITDA to 8X-10X

Commentary on M&A valuations: contracting businesses historically sold for ~4X EBITDA, but with private equity it is now common to sell for 8X to 10X, with additional upside from earn-outs and equity rolls.

“It’s not unusual for that same company to sell for a 8X to 10X multiple. If we split the difference and use 9X, the net to the contractor from the sale of his business ranges from $6.8 to $8.2 million. That’s a world of difference.”

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