EBITDA Multiples by Industry in 2026: The Honest Range, Sector by Sector

EBITDA multiples are not a single number — they’re a range that varies meaningfully by industry, by size, and by the recurring-revenue characteristics of the underlying business. A $2M EBITDA pest control business trades at 7-10x; a $2M EBITDA mechanical auto repair shop trades at 5-6x; a $2M EBITDA residential roofer trades at 3.5-5x. The differential isn’t about ‘quality’ in any subjective sense — it’s about contracted revenue percentage, retention rates, capital intensity, and the depth of PE consolidation activity in the sector. This guide walks through realistic 2026 multiple ranges across the major LMM industries with the underlying math that drives each.

This guide covers the 12 most-asked industries for 2026 multiple benchmarking. HVAC, plumbing, electrical contracting, roofing, pest control, dental DSOs, veterinary practices, auto repair (mechanical and collision), landscaping, SaaS, manufacturing, B2B services, e-commerce, and healthcare services. For each, we’ll provide a realistic LMM range ($1-10M EBITDA targets), explain the structural drivers behind that range (recurring revenue %, retention rates, growth, capital intensity), and identify what positions a business at the high vs low end of the range. The goal: anchor your expectations on industry-specific data rather than headline averages.

Our framework draws on direct work with 76+ active U.S. lower middle market buyers and observed transaction data across hundreds of LMM deals. We’re a buy-side partner. The buyers pay us when a deal closes — not the seller. That includes PE-backed home-services platforms, healthcare DSO consolidators, pest control rollups, vet platforms, manufacturing add-on programs, and SaaS/B2B services aggregators. The multiple ranges below come from active 2025-2026 transactions in our deal flow, not theoretical industry reports.

One critical framing note before you anchor on these numbers. Industry multiple ranges are population averages. Individual transactions can fall above or below the range based on specific business characteristics: recurring revenue % above industry norm, customer retention above industry norm, growth rate above industry norm, geographic concentration in a tailwind market, strategic synergy with a specific buyer. Use these ranges as a starting point for expectations, not as a ceiling or floor. The right buy-side partner can identify whether your specific business profile justifies the high end of your industry range.

“Multiple ranges are math, not magic. Pest control trades at 7-10x because 70-80% of revenue is contracted with 90%+ retention — that math supports 5-6x leverage in a PE financing structure, which supports the headline price. HVAC trades at 4-6x because the recurring mix is lower. SaaS trades at 6-10x because MRR is ~95%. Manufacturing trades at 4-7x because the recurring mix is customer-relationship-driven, not contracted. The seller who understands the multiple math underwrites their own deal — and stops anchoring on a competitor’s headline number from a different industry.”

Key Takeaways

• Recurring revenue percentage is the single biggest multiple driver: each 10 percentage points of contracted recurring revenue adds roughly 0.5-1x to the EBITDA multiple.
• Highest 2026 multiples: pest control (7-10x), veterinary specialty (12-18x), insurance brokerage (8-11x), SaaS (6-10x EBITDA / 3-8x ARR), behavioral health (8-12x post-pandemic).
• Mid-range 2026 multiples: HVAC (4-6x), plumbing (3.5-5.5x), dental DSO general (5-7x), B2B services (5-7x), manufacturing (4-7x), healthcare services (6-9x), auto repair collision (5-7x).
• Lower 2026 multiples: residential roofing (3.5-5x), general contracting (3-5x), mechanical auto repair sub-$2M (4-5x), restaurants (1.5-3x), retail (1-3x), e-commerce (0.5-1.5x revenue when unprofitable, 4-7x EBITDA when profitable).
• Multiples expand with size: sub-$1M EBITDA businesses typically trade 1-2x lower than the headline LMM range due to SBA capital structure constraints. $5M+ EBITDA platforms trade at the high end of every range.
• Strategic buyers may pay 1-2x premium when synergies are real (route density, customer book, geographic infill). Auction processes don’t guarantee a strategic buyer shows up — targeted outreach is often more effective.

What actually drives EBITDA multiples: the four-factor model

EBITDA multiples are the output of four structural factors, in roughly this order of importance. First: recurring revenue percentage (contracted, subscription, or membership-based revenue as a % of total revenue). Second: customer retention rate (revenue or logo retention measured over 12-24 months). Third: growth rate (organic revenue growth, ideally with operating leverage). Fourth: capital intensity (capex as % of revenue, working capital requirements, fixed asset turnover). These four factors collectively explain 70-80% of the variation in observed EBITDA multiples across LMM transactions.

Why recurring revenue dominates. PE buyers finance acquisitions with 4-6x leverage on EBITDA. The lender (a senior debt provider) underwrites debt service against the recurring portion of EBITDA, not project-based revenue that must be re-won every year. A pest control business with 70% contracted revenue can support 5x leverage; a project-based residential roofer with 0% contracted revenue can support only 3-3.5x. Higher leverage allows the PE buyer to pay a higher headline multiple while preserving the same equity return profile. The multiple difference is the leverage difference.

Why retention follows recurring revenue. Recurring revenue at 90% retention is structurally different from recurring revenue at 70% retention. The first compounds; the second slowly erodes. Pest control commands premium multiples not just because revenue is contracted, but because contracted revenue retains at 90%+. Dental practices command 5-7x because patient retention is 70-85% (lower than pest control). SaaS commands 6-10x because retention is often 95%+ (gross retention) and net retention can exceed 100% with expansion. The combined recurring-x-retention factor explains why some industries trade at premium multiples even when the headline contracted-revenue percentage is similar.

Why growth and capital intensity round out the model. Growth determines whether the EBITDA buyers are paying for is the EBITDA they’ll have at exit, plus value creation. A flat business at 5x EBITDA is paid 5x of today’s number; a 15% growth business at 5x EBITDA is paid 5x of a number that will be 50% larger in three years. Capital intensity determines free cash flow conversion — high capex businesses (manufacturing, capital equipment, real estate intensive) trade at lower EBITDA multiples to compensate for the cash that gets reinvested rather than distributed. Together, these factors round out the model and explain the residual variation after recurring revenue and retention.

HVAC: 4-6x EBITDA at sub-$2M, 6-8x at $2-5M

HVAC multiples in 2026 cluster in a 4-6x EBITDA range for sub-$2M EBITDA platforms and 6-8x for $2-5M EBITDA targets with strong service mix. The recurring-revenue thesis is moderate: maintenance memberships and service contracts represent 30-50% of platform revenue with 80-85% retention. Replacement equipment installation revenue is one-time but cyclical. The HVAC platform thesis is well-developed (Apex Service Partners, Wrench Group, Service Logic, Authority Brands, Sila Services, Champions Group), creating consistent buyer demand at the LMM range.

What pushes HVAC to the high end of the range. Maintenance membership penetration above 25% of customer base. Commercial service revenue above 30% of total. Geographic concentration in growing Sun Belt markets (Texas, Florida, Carolinas, Tennessee, Arizona). Technician retention above industry average (often measured as average tenure of 3+ years). Owner-replaceable operations (already has a general manager). At $2-5M EBITDA with these characteristics, an HVAC platform reaches the 7-8x ceiling. Above $5M EBITDA, the platform itself becomes a buyout target rather than an add-on, with multiples 8-10x in some PE-to-PE transactions.

What compresses HVAC into the low end of the range. Owner-operator with no general manager. Maintenance membership penetration below 15%. Heavy installation mix (above 70% of revenue from one-time installs vs service). Technician shortages or turnover. Concentration in slow-growth or shrinking geographies. Owner serving as the primary technician or sales rep. These characteristics push sub-$2M EBITDA HVAC platforms to 3.5-4.5x EBITDA — below the headline range.

Sub-$1M EBITDA HVAC: SBA territory, 3-4.5x SDE typical. Below the LMM platform threshold, HVAC sells primarily to SBA-financed individual buyers. Multiples drop to 3-4.5x SDE driven by SBA capital structure constraints (10% buyer equity, 10-year amortization, 1.25x debt service coverage requirements). Owner-replaceable operations with documented systems and 24+ months of clean books reach the 4-4.5x ceiling; owner-dependent operations compress to 2.5-3.5x. This is a different buyer pool entirely from the LMM platform range above.

Plumbing: 3.5-5.5x EBITDA, parallel to HVAC with slight discount

Plumbing multiples track HVAC closely with a modest discount, typically 0.5x lower at the same EBITDA size and recurring mix. The discount reflects three factors. First, plumbing’s emergency-repair mix is higher than HVAC’s installation mix — emergency repair is harder to schedule and price than maintenance contracts. Second, plumbing margins are typically 2-3 percentage points lower than HVAC at comparable scale. Third, the consolidation cycle is slightly less mature in plumbing-only platforms (most rollups are HVAC + plumbing + electrical combined under one platform).

Realistic plumbing multiples in 2026: 3.5-5.5x EBITDA for sub-$2M EBITDA, 5-7x for $2-5M EBITDA. The LMM platform thesis is strong: the same platforms that consolidate HVAC also consolidate plumbing (Roto-Rooter at Chemed Corp NYSE: CHE, Apex Service Partners, Wrench Group, Authority Brands with Benjamin Franklin Plumbing brand, Sila Services, Champions Group). Multiples reach the high end with strong service contract mix, commercial service revenue, and route density in metro markets. Pure-play residential plumbing in suburban markets without commercial mix trades at the lower end.

What licenses to remember when valuing plumbing acquisitions. Most US states require master plumber licensing to operate. The qualifying individual must be available at the buyer entity post-close, either through license transfer (where allowed) or by employing a licensed master plumber as a qualifying individual. This is rarely a deal-killer but it’s a diligence focus area and creates timing constraints. Sellers in license-restrictive states (California, New York, several others) should clarify license-transfer mechanics in early diligence to avoid surprises.

Sub-$1M EBITDA plumbing: 3-4x SDE typical for SBA buyers. Same dynamics as HVAC sub-$1M segment: SBA capital structure caps multiples around 4-4.5x SDE for clean owner-replaceable operations. Owner-dependent shops compress to 2.5-3.5x. The difference at this size is more about the seller’s willingness to provide owner financing and training period than about the underlying business quality.

Roofing: 3.5-5x EBITDA, lower than HVAC due to project-based revenue

Roofing multiples in 2026 cluster in a 3.5-5x EBITDA range, lower than HVAC and plumbing due to predominantly project-based revenue. Residential roofing is largely one-time replacement work driven by hailstorms, age-of-roof, and insurance claims. Commercial roofing has more recurring revenue from preventive maintenance contracts but is still less recurring than HVAC service. The recurring-revenue thesis (and therefore the multiple) is structurally weaker in roofing.

What separates the high end (4.5-5x) from the low end (3.5x) of the roofing range. Commercial mix above 50% of revenue (commercial roofing has preventive maintenance contracts and longer customer relationships). Geographic concentration in active-storm markets where revenue is consistent year-over-year (Texas, Colorado, Florida, Carolinas, Tennessee). Crew retention above industry average (roofing labor turnover is high; stable crews are valuable). Established Direct Repair relationships with insurance carriers for hail-storm work. Multi-state operations rather than single-metro concentration.

Multiples likely to expand 2026-2028 as roofing rollups mature. Roofing is the most active new rollup vertical in 2026. Tecta America (Altas Partners, commercial), CentiMark (commercial), Coastal Roofing Companies (residential), and several residential PE-backed platforms (launched 2023-2025) are competing for add-ons. As consolidation matures and platform competition intensifies, roofing multiples typically expand 0.5-1x over a 24-36 month period — the pattern observed in HVAC consolidation 2018-2022. Sellers within $500K of the $1M EBITDA threshold should consider whether 12-18 months of growth and consolidation maturity creates better timing.

Sub-$1M EBITDA roofing: 2.5-4x SDE for SBA buyers. Below the LMM threshold, roofing trades at 2.5-4x SDE driven by SBA capital structure plus the project-based revenue discount. Owner-dependent residential roofers without crew stability compress to the bottom of the range; commercial-mix roofers with stable crews and insurance relationships reach the top. Storm-restoration roofers face additional revenue volatility discount because a single year of low storm activity can disrupt the buyer’s debt service capacity.

Pest control: 7-10x EBITDA, the highest home-services multiple

Pest control commands the highest multiple of any home-services category in 2026: 7-10x EBITDA for $1M+ EBITDA platforms with strong recurring mix. The thesis is structural and durable. 70-80% of revenue is contracted (quarterly, monthly, or annual recurring service plans). Customer retention runs 85-95%. Gross margins are 40-50%. PE platforms can finance acquisitions at 5-6x leverage on the recurring portion, supporting headline multiples that wouldn’t work in less-recurring categories. Rollins (NYSE: ROL), Anticimex (EQT), Massey Services, Aptive Environmental, Truly Nolen, Arrow Exterminators, and Terminix (Rentokil Initial) are the active platforms.

What pushes pest control to the 9-10x ceiling. Commercial mix above 30% (food service, healthcare, education, multi-family residential commercial accounts). Termite plan attachment above 60% of residential customer base (termite plans run $300-500/year, high-margin). Geographic concentration in growing Sun Belt markets. Customer retention above 90% (industry leaders run 92-95%). Regulatory licensing in place across multiple states (creates barriers for buyers without license footprint). At $2M+ EBITDA with these characteristics, pest control sellers achieve 9-11x EBITDA.

What compresses pest control into the 7x floor. Residential-only operations without commercial accounts. Termite plan attachment below 30%. Customer retention below 85% (signals operational issues or service quality problems). Owner-operator status with no second-tier manager. Single-state operations without licensing optionality for the acquirer. These characteristics push sub-$2M EBITDA pest control to the 6-7.5x range.

Sub-$1M EBITDA pest control: 5-7x SDE, still premium relative to other home services. Below the LMM platform threshold, pest control still trades at premium multiples relative to HVAC or roofing of similar size. SBA buyers and PE add-on programs both compete for sub-$1M pest control with strong recurring mix — 5-7x SDE is achievable for clean operations. The recurring-revenue thesis works at any scale; the buyer pool just shifts from LMM platform to SBA buyer or PE add-on at lower sizes.

Dental DSOs: 5-7x EBITDA general practice, 7-10x specialty

Dental practice multiples in 2026 cluster in a 5-7x EBITDA range for general practices and 7-10x for specialty (orthodontics, oral surgery, pediatric, endodontics). The thesis: insurance-billed recurring patient streams, regulatory complexity favoring DSO scale, and operational improvements (procurement, marketing, IT, credentialing) that platform DSOs deliver. Heartland Dental (KKR & founder), MB2 Dental (Charlesbank), Smile Brands (multiple PE), Aspen Dental (Leonard Green), and Pacific Dental Services anchor the platform layer.

What separates 7x from 5x in general practice multiples. Multi-doctor practice (associates plus owner; the practice survives owner transition cleanly). PPO-heavy payer mix (commercial PPO > Medicare > Medicaid for revenue stability). Active patient count growth over 2-3 years. Strong hygiene production per chair. Geographic location in growing demographics. Modern operatory layout and digital infrastructure (intraoral scanners, digital radiography). Practice with these characteristics consistently reaches 6.5-7.5x EBITDA from active DSO buyers.

What pushes specialty practices to 7-10x. Specialty dentistry generates higher revenue per visit and has constrained provider supply. Orthodontics commands 7-9x EBITDA with strong patient case volume and orthodontist productivity. Oral surgery commands 8-10x for high-volume practices. Pediatric dentistry commands 6-9x with strong patient retention through teen years. Endodontics commands 7-10x for high-procedure-volume practices. Smile Doctors (Linden Capital) anchors orthodontics; Affordable Dentures & Implants (Triple Tree / Roark) anchors implant/denture; specialty-specific platforms compete in each sub-vertical.

Structuring expectations for dental sellers. DSO transactions typically include 5-15% rollover equity (you stay involved for 3-5 years), employment agreement at competitive comp post-close, performance-based earnout on patient retention or production metrics, and gradual transition out of clinical work over 3-7 years. Selling dentists should plan for these structures and not view them as concessions — they’re standard for the asset class. The headline multiple is what gets quoted; the structured proceeds (cash + rollover + earnout) is what actually arrives.

Veterinary: 8-12x general practice, 12-18x specialty hospitals

Veterinary practice multiples in 2026 are among the highest in healthcare services: 8-12x EBITDA for general practices, 12-18x for specialty and emergency hospitals. Demographic tailwinds (70%+ pet ownership in US households, structural rise in pet humanization) plus active multi-platform consolidation (Mars Veterinary Health 2,500+ clinics, NVA 1,000+ locations, Thrive Pet Healthcare, Pathway Vet Alliance, BluePearl, Ethos Veterinary Health, VetCor, PetVet Care Centers) drive premium multiples. Multiples have expanded 4-6x from 2015 levels.

What separates 10-12x from 8x in general practice. Wellness Plan penetration (subscription preventive care plans drive recurring revenue and command premium pricing). Active patient count growth. Multi-DVM staffing (practice survives owner transition). Strong client retention (12-month return rates above 65%). Modern facility and digital infrastructure. Geographic concentration in growing pet-ownership markets. Practices with these characteristics reach 10-12x EBITDA from active veterinary platforms.

What pushes specialty hospitals to 14-18x. Specialty hospitals (oncology, cardiology, orthopedic surgery, internal medicine, dermatology, ophthalmology) generate 2-4x the revenue per case of general practice. Constrained board-certified specialist supply creates pricing power. Referral-hub economics make customer acquisition cheaper. 24/7 emergency operations command demographic-tailwind premium. Mars Veterinary Health (BluePearl portfolio), Ethos Veterinary Health, Compassion-First Pet Hospitals (now Mars), and specialty-focused PE platforms compete actively for premium specialty hospitals at 14-18x EBITDA.

Sub-$1M EBITDA veterinary: 5-7x SDE typical. Below the LMM platform threshold, veterinary practices trade at 5-7x SDE. SBA-financed individual veterinarians (often associate DVMs becoming owners) drive the lower end. Smaller PE-backed regional consolidators and private veterinary aggregators compete in the $500K-$1M SDE range. The buyer pool is deeper than other home-services sectors at this size due to demographic tailwinds, supporting better multiples than HVAC or roofing of comparable size.

SaaS: 6-10x EBITDA or 3-8x ARR, depending on growth and gross retention

SaaS multiples in 2026 are typically expressed as multiples of ARR (annual recurring revenue) or EBITDA, depending on the company’s profitability stage. Profitable SaaS at scale: 6-10x EBITDA for $1M+ EBITDA targets with strong unit economics. Growth-stage SaaS that’s breakeven or slightly unprofitable: 3-8x ARR depending on growth rate, gross retention, and net dollar retention. Multiples have compressed materially from 2021-2022 highs (the ‘SaaSacre’ correction) but have stabilized in 2024-2026 at fundamentally-driven levels.

What drives 6x vs 10x in profitable SaaS EBITDA multiples. Growth rate (15%+ annual revenue growth pushes toward 9-10x; flat growth compresses to 5-6x). Gross retention (95%+ pushes toward 9-10x; 85% gross retention compresses to 6-7x). Net dollar retention (above 110% indicates healthy expansion revenue and supports premium multiples). Customer concentration (top 10 customers below 30% of revenue is healthy; above 40% compresses multiple). Vertical SaaS in attractive end-markets (healthcare, financial services, industrial) commands premium versus horizontal SaaS in saturated markets.

ARR-multiple methodology for unprofitable SaaS. Unprofitable SaaS is typically valued on ARR multiples rather than EBITDA. The Rule of 40 (growth rate + EBITDA margin) is a common framework: companies above 40% achieve premium ARR multiples, below 40% face discount. Growth-stage SaaS in 2026: 3-5x ARR for sub-30% growth with negative EBITDA, 5-8x ARR for 30-50% growth with breakeven EBITDA, 8-12x ARR for 50%+ growth with strong unit economics. Strategic acquirers may pay above this range for specific synergies.

Vertical SaaS premium and the 2026 thesis. Vertical SaaS (purpose-built for a specific industry like dental practice management, veterinary practice management, restaurant POS, construction project management) commands premium multiples versus horizontal SaaS. The thesis: domain expertise creates a moat, customer acquisition is more efficient through industry channels, and net dollar retention is typically higher in vertical applications. Vertical SaaS platforms with $5M+ ARR in attractive end-markets often trade at 8-12x ARR, even at modest growth rates — well above the SaaS average.

Manufacturing: 4-7x EBITDA, varies by capital intensity and customer mix

Manufacturing multiples in 2026 cluster in a 4-7x EBITDA range with significant variation by sub-vertical. Capital-light specialty manufacturing with sticky customer relationships trades at the high end (6-7x EBITDA). Capital-intensive contract manufacturing with concentrated customer base trades at the low end (4-5x). The industry-specific drivers: customer concentration (above 25% of revenue in any single customer compresses multiple), end-market attractiveness (medical device contract manufacturing premium; legacy industrial discount), capital intensity (each percentage point of capex/revenue compresses multiple by 0.1-0.2x), and gross margin durability.

Sub-categories within manufacturing multiples. Specialty/niche manufacturing with proprietary products: 5-7x EBITDA. Contract manufacturing for branded customers: 4-6x EBITDA. Medical device contract manufacturing: 6-8x EBITDA (premium for FDA-regulated quality systems and customer stickiness). Food & beverage co-manufacturing: 5-8x EBITDA. Industrial services and MRO (maintenance, repair, operations): 5-7x EBITDA. Capital equipment manufacturing: 4-6x EBITDA with significant working capital adjustments.

Customer concentration is the single biggest manufacturing multiple driver. A manufacturer with 35% of revenue concentrated in a single customer trades at 4-4.5x EBITDA regardless of other factors — the concentration risk caps the multiple. The same manufacturer with no customer above 15% trades at 5.5-6.5x. Reducing concentration over 12-24 months pre-sale (intentional new-customer development, even at the cost of the concentrated customer’s satisfaction) can produce 1-1.5x of multiple expansion. This is the highest-leverage operational improvement available to most manufacturing sellers.

End-market drives multiple expansion or compression. Manufacturing serving structurally growing end-markets (medical device, aerospace, defense, industrial automation) commands premium multiples. Manufacturing serving cyclical or declining end-markets (legacy oil & gas, traditional retail packaging, residential construction) faces compression. The same manufacturing capability serving different end-markets produces 1-2x multiple variation. Diversification across end-markets de-risks valuation.

B2B services: 5-7x EBITDA, with significant variation by recurring mix

B2B services covers a wide range of business types — accounting firms, marketing agencies, IT MSPs, consulting practices, recruiting firms, commercial cleaning, facilities services, employer services — and multiples vary widely within the 5-7x EBITDA range. The unifying multiple driver is recurring or contracted revenue percentage. IT MSPs with 60-75% MRR-based revenue trade at 6-9x EBITDA — the high end of B2B services. Accounting firms with annual recurring tax/audit/CFO services trade at 5-7x. Marketing agencies with retainer-based client relationships trade at 4-6x. Project-based consulting trades at 3-5x because every dollar must be re-won every year.

IT MSP: the high-multiple B2B services subcategory. Managed IT service providers (MSPs) trade at 6-9x EBITDA driven by 60-75% MRR-based revenue from monthly contracts. Active platforms include ConvergeOne (CVC), New Era Technology, Logically (Riverside Company), All Covered (Konica Minolta), Evergreen Services Group, and Service Express. Multiples expand with recurring revenue percentage above 70%, gross margin above 40%, customer retention above 92%, and end-market diversification beyond a single industry.

Accounting firms and marketing agencies: 4-7x with rollup activity. Accounting firms with annual recurring engagement clients trade at 5-7x EBITDA. PE-backed roll-ups in the accounting space (BPM acquisition by Cherry Bekaert, Aprio, Sax LLP recap, Marcum, Baker Tilly capital partner relationships) are creating buyer demand. Marketing agencies trade at 4-6x with the high end going to performance-marketing agencies with subscription-style engagement models. Project-based creative agencies trade at 3-5x. Both verticals are early-cycle in PE consolidation with multiples likely to expand 0.5-1x over the next 24-36 months.

Commercial cleaning, facilities services, and employer services. Commercial cleaning and facilities services with multi-year contracts trade at 5-7x EBITDA. Employer services (payroll, HR outsourcing, benefits administration) trade at 6-8x with the highest multiples going to PEO-style integrated employer service providers. ABM Industries (NYSE: ABM), Aramark (NYSE: ARMK), and ISS Facility Services (private, formerly NASDAQ-listed) are public benchmarks in commercial facilities; PE platforms include Sentinel Capital’s Aim Janitorial, Fortis Building Solutions, and several regional PE-backed cleaning/facilities aggregators.

E-commerce and consumer brands: 0.5-1.5x revenue, 4-7x EBITDA when profitable

E-commerce multiples in 2026 vary dramatically by profitability stage and brand strength. Profitable e-commerce brands ($1M+ EBITDA) trade at 4-7x EBITDA in the LMM range. Unprofitable or breakeven e-commerce companies trade at revenue multiples of 0.5-1.5x depending on growth, brand strength, and customer retention. Multiples have compressed dramatically from 2020-2021 highs (post-COVID e-commerce bubble) and have stabilized at fundamentally-driven levels in 2024-2026.

What separates 5x from 7x in profitable e-commerce EBITDA multiples. Brand strength (proprietary brand vs reseller). Customer retention (repeat purchase rates above 40% drive premium). Channel diversification (DTC + Amazon + retail vs single-channel concentration). Gross margin (above 50% indicates strong pricing power). Customer acquisition cost trends (decreasing CAC with stable LTV signals operational maturity). E-commerce brands with these characteristics reach 6-8x EBITDA from strategic acquirers and PE-backed consumer aggregators.

Why e-commerce revenue multiples have collapsed since 2021. Three factors. First, the 2020-2021 bubble in DTC e-commerce drove unsustainable multiples (5-10x revenue for unprofitable brands) on the assumption of continued user-acquisition tailwinds. Second, Apple iOS 14.5 ATT changes made paid acquisition more expensive and less measurable, compressing growth-at-all-costs models. Third, capital-cost increases in 2022-2024 forced PE buyers to demand profitability rather than fund growth. The net effect: 0.5-1.5x revenue is the realistic range for unprofitable DTC brands today, versus 3-5x revenue in 2021.

Amazon FBA and aggregator multiples. Amazon FBA private label brands trade at 2-4x EBITDA in 2026, down from 4-6x in 2021-2022. The Thrasio-led aggregator boom collapsed in 2023-2024 (Thrasio bankruptcy filing, multiple aggregator down-rounds and shutdowns). Surviving aggregators (Razor Group, Branded, several smaller specialists) underwrite at fundamentally lower multiples. Sellers with large Amazon-only revenue concentration face additional discount due to platform-dependency risk.

Healthcare services (non-DSO/non-vet): 6-9x EBITDA across specialties

Healthcare services beyond dental and veterinary — dermatology, ophthalmology, behavioral health, gastroenterology, orthopedics, urgent care — trade at 6-9x EBITDA in 2026 with significant variation by specialty. The shared thesis: insurance-billed recurring patient streams, fragmented physician-owned practice ownership, regulatory complexity favoring scale, and demographic tailwinds. Specific specialty multiples: dermatology 7-10x, ophthalmology 8-12x for surgical centers, behavioral health 8-12x post-pandemic expansion, gastroenterology 7-10x, orthopedics 6-9x, urgent care 5-8x.

Dermatology and ophthalmology: the highest healthcare services multiples. Dermatology platforms include US Dermatology Partners (Abry Partners), Schweiger Dermatology (Goldman Sachs and Pamlico Capital), and Forefront Dermatology (PEAK Capital). Ophthalmology platforms include EyeCare Partners (Partners Group), American Vision Partners (Centerbridge), and MyEyeDr (Goldman Sachs). Multiples are driven by procedure mix (cosmetic and surgical procedures premium over medical/diagnostic), provider productivity, and ambulatory surgery center (ASC) integration. Practices with ASC components trade at the high end of every healthcare services range.

Behavioral health: post-pandemic multiple expansion. Behavioral health (mental health, addiction treatment, substance use disorder) saw multiple expansion of 1-3x from 2019 to 2024 driven by post-pandemic demand surge and policy tailwinds (insurance parity enforcement, telehealth coverage). Active platforms include BayMark Health Services (Webster Capital), Behavioral Health Group (Vistria Group), and Acadia Healthcare (NASDAQ: ACHC). Multiples 8-12x EBITDA for clinic-based platforms; 10-14x for specialty residential treatment. Multiples may compress modestly in 2026-2027 as supply expands but remain at premium levels.

Multi-specialty primary care and value-based care. Multi-specialty primary care platforms (One Medical acquired by Amazon, Iora Health, Oak Street Health acquired by CVS) have largely consolidated at the public-company scale. PE activity continues in physician practice management, value-based care, and specialty primary care (Medicare Advantage focused, Medicaid focused, employer health). Multiples 6-9x EBITDA for clinic-based primary care; 8-12x for value-based care platforms with capitated revenue and population health capabilities.

How size and structure shift multiples within every industry

The multiple ranges discussed throughout this guide are LMM ranges ($1-10M EBITDA targets). Below and above this range, multiples shift in predictable ways. Sub-$1M EBITDA businesses typically trade 1-2x lower than the headline LMM range due to SBA capital structure constraints — a pest control business at $400K SDE trades at 5-6x, not 7-10x; an HVAC business at $500K SDE trades at 3-4x, not 4-6x. Below the LMM threshold, the buyer pool shifts from PE platforms to SBA-financed individuals, search funders, and PE add-on programs.

Above the LMM range: $10M+ EBITDA businesses trade at expanded multiples. $10M+ EBITDA platforms become buyout targets rather than add-ons, and multiples expand 1-3x above the LMM range across most industries. A $15M EBITDA HVAC platform trades at 8-10x; a $15M EBITDA pest control platform trades at 10-13x. The multiple expansion reflects deeper buyer pool (mid-market PE funds, sponsor-to-sponsor transactions, strategic acquirers at scale), more leverage capacity, and platform-formation premium.

Asset-light vs asset-heavy structures within the same industry. Asset-light structures (subscription, contracted, recurring revenue) command premium versus asset-heavy structures (capital equipment, real estate intensive) within the same industry. A residential plumbing business with strong service contract mix and minimal capex trades 0.5-1x higher than the same revenue plumbing business with heavy installation mix and large equipment fleet. Buyers normalize for this through working capital and capex normalization in their underwriting.

Strategic vs financial buyer multiple differential. Strategic buyers (operating companies in your industry) often pay 1-2x premium when synergies are real (route density, geographic infill, customer book consolidation, technology adjacency, vertical integration). The premium isn’t guaranteed — many strategics underpay because they don’t face PE leverage constraints — but the upside cases come from strategics. Identifying the 3-5 most likely strategic acquirers in your industry and reaching them through a buy-side intermediary or direct relationship is often the highest-leverage positioning effort for sellers above $2M EBITDA.

Conclusion

EBITDA multiples are math, not magic. Recurring revenue percentage, customer retention rate, growth, capital intensity, and PE consolidation maturity together explain 80% of the variation in observed multiples across industries. Pest control trades at 7-10x because 70-80% of revenue is contracted with 90%+ retention — the math supports 5-6x leverage in a PE financing structure, which supports the headline price. HVAC trades at 4-6x because the recurring mix is 30-50%. SaaS trades at 6-10x EBITDA or 3-8x ARR because MRR-based revenue is ~95% with 100%+ net dollar retention. Manufacturing trades at 4-7x because recurring relationships are customer-driven, not contracted. Veterinary specialty trades at 12-18x because constrained specialist supply, high revenue per case, and structural pet-humanization tailwinds combine. Sellers who anchor on industry-specific data — rather than headlines from another vertical — underwrite their own deals with realistic expectations. And if you want an industry-specific multiple read based on your actual financials, we’re a buy-side partner that works directly with 76+ active buyers across every industry covered above — the buyers pay us, not you, no contract required.

Frequently Asked Questions

What’s a realistic EBITDA multiple for an HVAC business in 2026?

Sub-$1M SDE owner-operator residential HVAC: 3-4.5x SDE. $1-2M EBITDA HVAC platforms: 4-6x EBITDA. $2-5M EBITDA platforms with 25%+ maintenance membership penetration and commercial service mix: 6-8x EBITDA. $5M+ EBITDA platforms in growing geographies: 7-10x EBITDA in PE buyout transactions. Multiples improve with maintenance membership penetration, commercial mix, technician retention, and Sun Belt geography.

Why does pest control trade at 7-10x EBITDA when HVAC trades at 4-6x?

Three structural factors. First, pest control is 70-80% contracted recurring revenue versus 30-50% for HVAC service contracts. Second, pest control customer retention runs 85-95% versus 70-85% for HVAC. Third, pest control’s regulatory moat (state pesticide applicator licensing, EPA reporting) is harder for new entrants to bypass. The combination supports higher leverage in PE financing structures (5-6x on pest control vs 4-5x on HVAC), which translates directly to higher acceptable purchase multiples.

What’s a realistic EBITDA multiple for a SaaS business in 2026?

Profitable SaaS at $1M+ EBITDA: 6-10x EBITDA driven by growth rate, gross retention, and net dollar retention. Growth-stage SaaS that’s breakeven or unprofitable: 3-8x ARR. Vertical SaaS in attractive end-markets (healthcare, financial services, industrial) commands premium versus horizontal SaaS. Multiples have compressed materially from 2021-2022 highs but have stabilized in 2024-2026 at fundamentally-driven levels.

What’s a realistic multiple for an e-commerce business in 2026?

Profitable e-commerce ($1M+ EBITDA): 4-7x EBITDA depending on brand strength, channel diversification, customer retention, and gross margin. Unprofitable or breakeven e-commerce: 0.5-1.5x revenue. Amazon FBA private label: 2-4x EBITDA, down from 4-6x in 2021-2022 after the aggregator collapse. Multiples driven primarily by repeat purchase rates, channel diversification, and gross margin durability.

How do dental DSO multiples compare to veterinary multiples?

Dental DSO general practice: 5-7x EBITDA. Dental specialty (orthodontics, oral surgery, pediatric, endodontics): 7-10x. Veterinary general practice: 8-12x. Veterinary specialty/emergency: 12-18x. Veterinary multiples are higher due to demographic tailwinds (pet humanization), constrained board-certified specialist supply, and active multi-platform consolidation that has expanded multiples 4-6x from 2015 levels.

What’s the EBITDA multiple range for manufacturing businesses?

Specialty/niche manufacturing with proprietary products: 5-7x EBITDA. Contract manufacturing for branded customers: 4-6x EBITDA. Medical device contract manufacturing: 6-8x EBITDA. Food & beverage co-manufacturing: 5-8x EBITDA. Customer concentration (above 25% in any single customer) compresses multiples by 0.5-1x. End-market attractiveness (medical, aerospace, industrial automation premium; legacy industrial discount) drives 1-2x of variation within categories.

Why does customer concentration compress multiples so much?

A customer at 35% of revenue creates two risks for the buyer. First, churn risk — if that customer leaves post-close, 35% of revenue evaporates and the deal economics collapse. Second, pricing risk — the concentrated customer has leverage to demand price reductions because they know how dependent the business is on them. PE buyers underwrite both risks aggressively, typically discounting the multiple by 0.5-1x for every 10 percentage points of concentration above 25%. Reducing concentration over 12-24 months pre-sale produces measurable multiple expansion.

Do multiples really expand that much above $5M EBITDA?

Yes — typically 1-3x across most industries. The expansion reflects deeper buyer pool (mid-market PE funds, sponsor-to-sponsor transactions, strategic acquirers at scale), more leverage capacity (5-7x leverage available at this size vs 4-5x at LMM), and platform-formation premium. A $15M EBITDA HVAC platform trades at 8-10x; a $15M EBITDA pest control platform trades at 10-13x. Sellers within striking distance of $5-10M EBITDA may benefit financially from waiting 12-24 months to grow into the higher multiple range.

What’s the difference between SDE and EBITDA multiples?

SDE (Seller’s Discretionary Earnings) includes the owner’s full compensation package — salary, benefits, personal expenses run through the business. EBITDA assumes a market-rate management team is already in place. For owner-operator businesses, SDE is typically $100-300K higher than EBITDA. SDE multiples are typically lower than EBITDA multiples (e.g., 3-4x SDE vs 5-6x EBITDA for the same business) because the SDE numerator is larger. Buyers at sub-$750K underwrite using SDE; buyers at $1M+ EBITDA underwrite using EBITDA.

How much does a strategic buyer typically pay above a financial buyer?

1-2x EBITDA premium when synergies are real and quantifiable: route density (HVAC, pest control, landscaping), customer book consolidation (insurance, B2B services), geographic infill (any consumer-services), technology adjacency (vertical SaaS), or vertical integration (specialty distribution). The premium isn’t guaranteed — strategics often underpay because they don’t face PE leverage constraints — but the upside cases come from strategics. Sellers above $2M EBITDA should identify their top 3-5 strategic acquirers and pursue them in parallel with PE buyers.

Are these multiples gross of working capital, or what?

These are enterprise value (EV) multiples on EBITDA — the headline price the buyer pays before working capital adjustments. Working capital adjustment is calculated separately at close: the buyer expects to receive normal operating working capital (typically 30-60 days of receivables minus 30-45 days of payables) and price adjusts up or down for any deviation from the target. On a typical LMM deal, working capital adjustment shifts 1-3% of EV. The headline multiple is what gets quoted; cash to seller is calculated after working capital, debt repayment, and transaction costs.

How current are these 2026 multiple ranges?

These ranges reflect 2025-2026 transaction activity in the LMM segment based on observed deals across our 76+ buyer network and external benchmarks (PitchBook, GF Data, IBISWorld, public-company precedent). Multiple ranges typically shift 0.5-1x annually based on credit cycle, public-comparable trading multiples, and PE fundraising activity. Sellers should anchor on these ranges for the next 6-12 months but verify with a current buy-side relationship before going to market.

How is CT Acquisitions different from a sell-side broker or M&A advisor?

We’re a buy-side partner, not a sell-side broker. Sell-side brokers represent you and charge you 8-12% of the deal (often $300K-$1M) plus monthly retainers, run a 9-12 month auction process, and require 12-month exclusivity. We work directly with 76+ buyers — PE platforms, strategic consolidators, family offices, and search funders — across every industry covered in this guide. They pay us when a deal closes. You pay nothing. No retainer, no exclusivity, no contract until a buyer is at the closing table. You can walk after the discovery call with zero hooks. We move faster (60-120 days from intro to close) because we already know which buyer’s buy-box fits your business and what multiple range is realistic for your specific industry and profile.

Sources & References

All claims and figures in this analysis are sourced from the publicly available references below.

1. PitchBook Lower Middle Market Private Equity Industry Reports — Industry-level deal flow data, transaction multiple ranges, and EBITDA multiple precedent across HVAC, dental DSO, veterinary, pest control, manufacturing, and SaaS verticals.
2. GF Data Resources — LMM Transaction Multiple Reports — Quarterly aggregated EBITDA multiple data on LMM ($10-250M EV) private company transactions, including TEV/EBITDA breakdowns by size, industry, and capital structure.
3. IBISWorld US Industry Reports (Industry Sizing & Concentration) — Industry size, fragmentation, recurring revenue characteristics, and concentration ratios used to benchmark multiple ranges for HVAC, plumbing, roofing, pest control, veterinary, dental, manufacturing, and B2B services.
4. BVR (Business Valuation Resources) — Pratt’s Stats / DealStats — Transaction database with private company sale multiples, used to validate observed multiple ranges across industry verticals at sub-$10M EBITDA scale.
5. SaaS Capital Index — Public SaaS Multiple Tracking — Tracking of public SaaS company EV/Revenue multiples used as benchmark for private SaaS LMM transactions, including the 2021-2024 multiple compression cycle.
6. Rollins, Inc. (NYSE: ROL) Investor Relations — Public-company filings showing pest control consolidation strategy, acquisition multiple precedent, and recurring revenue mix that supports the 7-10x EBITDA category multiple.
7. Heartland Dental DSO Affiliated Practice Network — Public-facing disclosure of 3,000+ affiliated practices supporting the 5-7x EBITDA dental DSO multiple range and the consolidation maturity of the dental services vertical.
8. Mars Veterinary Health Network Disclosures — Disclosure of 2,500+ veterinary clinics globally under Banfield, BluePearl, VCA brands supporting the 8-12x general practice and 12-18x specialty hospital EBITDA multiple ranges.
9. Federal Reserve H.15 Selected Interest Rates — Senior Debt Pricing Reference — Federal Reserve interest rate data used as a reference for senior debt pricing in PE acquisition financing, which influences the leverage that drives EBITDA multiple ranges across industries.
10. Driven Brands Holdings (NASDAQ: DRVN) Investor Relations — Public-company disclosures showing auto repair (mechanical, collision, glass) consolidation across Take 5 Oil Change, Meineke, Maaco, CARSTAR brands, supporting the 4-7x mechanical and 5-7x collision EBITDA multiple ranges.