Industry multiples
EBITDA Multiples by Industry: 2026 Complete Guide
EBITDA multiples vary dramatically by industry, from 3x for local service businesses to 15x+ for high-growth tech companies. This guide provides current multiples across 20+ sectors with analysis of what drives the differences.
Why EBITDA Multiples Matter
EBITDA multiples are the most widely used valuation benchmark in private company mergers and acquisitions. When someone says a business sold for "5x EBITDA," they mean the purchase price was five times the company's annual Earnings Before Interest, Taxes, Depreciation, and Amortization. Understanding the typical multiple range for a specific industry gives buyers and sellers a crucial reference point for negotiations and helps identify whether a particular business is priced above or below market.
Multiples reflect the market's assessment of an industry's growth prospects, risk profile, capital intensity, and competitive dynamics. Higher multiples indicate that buyers expect stronger future performance relative to current earnings.
Technology and Software
Technology businesses command the highest multiples in the private market. SaaS companies with strong metrics trade at 8-15x EBITDA depending on growth rate, retention, and scale. IT services firms typically command 6-10x, while managed service providers (MSPs) range from 5-8x. The premium reflects recurring revenue models, high margins, and scalability.
Healthcare and Professional Services
Healthcare practices vary widely: dental practices trade at 5-7x, physician practices at 5-8x, and behavioral health at 6-10x. Veterinary practices have seen significant multiple expansion, now trading at 6-9x driven by PE consolidation. Accounting and law firms typically sell at 4-7x EBITDA depending on revenue concentration and transferability of client relationships.
Manufacturing and Distribution
Manufacturing businesses typically trade at 4-7x EBITDA, with specialized or proprietary manufacturing commanding the higher end. Distribution companies range from 4-6x, with value-added distribution earning premiums over commodity distribution. Key drivers include customer concentration, margin profile, and equipment condition.
Consumer and Retail
Retail businesses face compressed multiples of 3-5x due to e-commerce competition and margin pressure. Restaurants typically trade at 3-5x, with multi-unit concepts commanding premiums. Franchise businesses benefit from system-level multiples that often exceed independent operator valuations by 1-2x turns.
What Drives Multiple Variation
Within any industry, individual businesses can trade well above or below the average. Key factors that influence where a specific business falls include: revenue growth rate, recurring vs. one-time revenue, customer concentration, owner dependency, margin profile, competitive moat, and geographic market attractiveness. A business with all favorable factors may command a 30-50% premium to the industry median.