Valuation Multiple Arbitrage Drives PE Returns in Home Services

PE firms buy home services companies at lower multiples (e.g., 5x EBITDA) and aim to sell the aggregated platform at higher multiples (e.g., 7x or more), creating significant value through multiple arbitrage combined with EBITDA growth.

“The difference between a 5x and a 7x multiple on 3 million in EBITDA is 6 million dollars.”

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