SDE Multiplier by Industry: 2026 Ranges Across HVAC, Plumbing, Restaurant, Dental, Vet, IT MSP, E-Commerce and More

SDE multiples vary by industry by a factor of 4-5x in 2026. A $500K SDE business in a thin-buyer-pool industry like a stand-alone family restaurant might fetch $750K-$1.2M. The same $500K of SDE in an active-buyer-pool industry like a small-animal vet practice can fetch $3M-$4M. The underlying cash flow is identical — the difference is entirely the buyer pool, the industry’s recurring revenue dynamics, the regulatory moat, and the active consolidator landscape. Owners who don’t know their industry’s SDE-multiple range will either over-price (and watch deals fall apart) or under-price (and leave hundreds of thousands on the table).

This guide is for owners with $200K-$2M of SDE looking to benchmark against their specific industry. We’ll walk through the 2026 SDE multiple ranges for the most common small-business and lower middle-market industries: HVAC, plumbing, electrical, roofing, lawn/landscape, pest control, restaurants, retail, e-commerce, B2B services, IT MSP, marketing agencies, accounting, dental, vet, optometry, medical aesthetics, and a handful of niche categories. For each industry, we’ll explain the multiple range, the underlying drivers (recurring revenue percentage, growth, fragmentation, buyer-pool depth, regulatory dynamics), and the operational levers that move you within the range.

The framework draws on direct work with 76+ active U.S. lower middle-market buyers and the broader sub-LMM ecosystem. We’re a buy-side partner. The buyers pay us when a deal closes — not the seller. That includes SBA-financed individual buyers (the dominant pool for sub-$1M SDE), search funders and independent sponsors, family offices with sector specializations, PE add-on programs running active roll-ups in trades and healthcare, and direct platform-level PE acquisitions. The patterns below come from observed deal data across thousands of sub-$2M SDE transactions in 2024-2026.

One important note before the industry tables. These ranges are for SDE multiples on businesses being underwritten by SBA buyers, search funders, or PE add-on programs that price to the SDE math. Above $1.5M of normalized earnings in most industries, the buyer pool shifts to LMM PE platforms that price to EBITDA at higher multiples (typically 1-2x higher, equating to 30-50% higher headline price). If your earnings are above the SBA-buyer ceiling for your industry, see our SDE vs EBITDA guide — you may be reporting the wrong metric.

“The SDE multiple isn’t a function of how good your business is — it’s a function of how deep the buyer pool is for your specific industry, and how much that pool is willing to pay relative to alternative deployments of their capital. A perfect business in a thin buyer pool will trade for less than a mediocre business in a deep pool. Knowing your industry’s actual buyer-pool depth is the first step to pricing the deal correctly.”

Key Takeaways

• Healthcare services lead with 4-8x SDE: vet 5-8x, dental 4-6x, optometry 4-6x, medical aesthetics 4-7x. DSO/MSO consolidation drives premium multiples.
• Trades and home services cluster at 2.5-5x SDE: HVAC 3-5x (highest), plumbing 2.5-4.5x, electrical 2.5-4x, pest control 3-5x. PE roll-ups (Wrench Group, ARS/Rescue Rooter, Authority Brands, Rentokil) compete with SBA buyers.
• B2B services and IT MSP at 2.5-5x SDE: IT MSP 3-5x with recurring revenue premium, B2B services 2.5-4x, accounting 2.5-4x, marketing agencies 2-3.5x.
• Restaurants 1.5-3x SDE; e-commerce 1-2.5x SDE. Both have thinner buyer pools, weaker recurring revenue, and historically high failure rates that compress SBA underwriting.
• Within-industry premiums (top 25th percentile) come from: recurring revenue >50%, customer concentration <20%, second-tier manager in place, organic growth >5%, clean books with 24+ months of monthly closes.
• Within-industry discounts (bottom 25th percentile) come from: project-based revenue, owner-personality dependence, customer concentration >30%, declining trend, weather/seasonality exposure, key-person risk.

Why SDE multiples vary so much by industry: the six drivers

SDE multiples are not a function of how ‘good’ a business is — they’re a function of six specific market dynamics that determine how deeply buyers will pay for that industry’s cash flow. Understanding the drivers explains why the same $500K of cash flow is worth $1.2M in a marginal restaurant and $4M in a small-animal vet practice. The drivers also explain why owners can’t simply ‘negotiate up’ to a higher multiple — the constraint is structural, not negotiation skill.

Driver 1: recurring revenue percentage. Industries with high recurring revenue (subscription, contracted maintenance, retainer relationships, repeat appointment-based services) trade at 30-60% higher SDE multiples than industries with project-based or transactional revenue. Recurring revenue makes SBA debt service predictable, makes search-fund operating-thesis cleaner, and makes PE roll-up exit multiples higher. Industries with structural recurring revenue: pest control, IT MSP, dental hygiene, vet wellness plans, lawn/landscape maintenance contracts, accounting (tax season cycle), HVAC service agreements.

Driver 2: industry fragmentation and buyer-pool depth. Highly fragmented industries (thousands of small operators, no dominant players) have deep buyer pools because they’re prime roll-up targets. PE platforms in fragmented sectors run aggressive add-on programs that compete with SBA buyers and search funders for deal flow, pulling multiples up. Examples: HVAC (140,000+ U.S. operators, dozens of active PE roll-ups), dental (200,000+ practitioners, DSO consolidation in full swing), pest control (30,000+ operators, Rentokil/Rollins/Anticimex consolidating). Concentrated industries (few large players, limited add-on activity) have thinner buyer pools and lower multiples.

Driver 3: regulatory moat and licensing. Industries with state licensing requirements, certifications, or regulatory barriers have higher multiples because the regulatory complexity creates a buyer-pool filter and reduces direct-to-customer competition. Healthcare services (DDS, DVM, OD licenses), specialty trades (electrical, plumbing licenses in most states), accounting (CPA), HVAC (EPA refrigerant certifications) all benefit from regulatory premiums. Unregulated services (general retail, basic e-commerce, marketing agencies) trade at lower multiples because the moat is weaker.

Driver 4: capital intensity and asset base. High capital intensity (heavy equipment, real estate, inventory) creates both opportunity and constraint. SBA loans cap at $5M total project, so a capital-intensive business consumes loan capacity that would otherwise go to multiple. PE buyers prefer asset-light businesses where the EV/EBITDA multiple isn’t weighed down by working capital and capex. Asset-heavy industries (manufacturing, equipment-intensive trades, restaurants with real estate) often trade at lower multiples on a normalized basis. Asset-light services (IT MSP, B2B professional services) trade at higher multiples.

Driver 5: growth rate and category tailwind. Industries in structural growth (telehealth-adjacent services, IT/cybersecurity services, home services in growth markets) trade at premium multiples. Industries in structural decline (traditional retail, legacy print services, some restaurant categories) trade at discount multiples. The category tailwind matters because it affects the buyer’s 5-7 year exit-multiple expectation, which feeds back into entry pricing.

Driver 6: historic deal volume and price-discovery. Industries with active M&A history (lots of recent comparable transactions) have well-calibrated multiple expectations on both sides of the table. Industries with thin deal volume (few comparables) have wider bid-ask spreads and more friction. GF Data, Pratt’s Stats, and BizBuySell’s sold-listing database track historic SDE multiples by industry; their data shows how much variance there is across industries with similar underlying characteristics but different deal-volume histories.

HVAC: 3-5x SDE (highest in trades)

HVAC commands the highest SDE multiples in the trades segment in 2026: 3-5x for sub-$1M SDE businesses, with premium businesses (high recurring service contracts, route density, established residential brand) reaching 4.5-5.5x. The driver is the most active PE roll-up activity of any trade: Wrench Group (Trivest Partners portfolio company), Wright Heating & Cooling, Rebel HVAC (Trilantic North America), Sila Services (Centre Lane Partners), Apex Service Partners (Alpine Investors), Authority Brands (Apax Partners), Service Experts (Lennox-affiliated). The platform-level competition for add-ons creates a price floor that pulls SBA-buyer pricing up.

What drives HVAC to the top of trades. Recurring revenue from service agreements (preventative maintenance contracts) typically 25-50% of revenue. Repeat customer relationships drive 60%+ of installation revenue from existing customer base. EPA refrigerant certifications create regulatory moat. Aging U.S. residential HVAC installed base ensures replacement demand. Route density premium for businesses with concentrated geographic footprint. Active PE platform demand for add-ons in the $400K-$2M SDE range.

Top-of-range HVAC characteristics (4.5-5.5x SDE). 50%+ recurring service contract revenue. Sub-15% customer concentration. Owner-replaceable role with second-tier service manager. Strong online reviews (Google Maps 4.6+ rating, 100+ reviews). Mix of residential (60%+) and light commercial (20%+). Geographic density (technicians within 30-minute drive of most jobs). Documented 5-10% organic growth. Clean books with monthly closes. Located in active growth metro (Sun Belt cities, growth-state secondary metros).

Bottom-of-range HVAC characteristics (2.5-3.5x SDE). Project-based residential install revenue with low service contract attachment. Owner-as-technician business with no second tier. Customer concentration above 25%. Aging fleet of equipment without recent capex investment. Slow-growth or declining metro. Single-trade specialty (commercial-only or new-construction-only). Weather seasonality exposure (Northeast / Upper Midwest cold-only markets). Clean books absent.

Cross-reference industry-specific guide. See our How to Sell an HVAC Business guide for the full sale-process framework specific to HVAC. The buyer-pool depth dynamic in HVAC is materially different from other trades because of the active PE consolidation, which means HVAC sellers should always compare an SBA-buyer offer against a PE add-on offer to see which clears higher.

Plumbing: 2.5-4.5x SDE

Plumbing trades at 2.5-4.5x SDE in 2026 — slightly below HVAC because plumbing has less recurring revenue (no preventative maintenance equivalent of HVAC service contracts) and more project-based residential install work. Active PE consolidators include Wrench Group (combined plumbing + HVAC platform), Authority Brands (Mr. Rooter, Benjamin Franklin Plumbing), ARS/Rescue Rooter, Sila Services. The PE buyer pool exists but is thinner than HVAC, which keeps plumbing multiples 0.5x below HVAC on average.

What drives plumbing within its range. Recurring revenue from drain cleaning subscriptions and water heater maintenance plans (where present): 10-25% of revenue typical. Emergency-services pricing power (pricing premium on after-hours calls). Strong residential brand and online reviews. Commercial vs residential mix (commercial trades at lower multiples due to project-based revenue). Specialty premium for sewer replacement, hydro-jetting, repipes (technical specialties command higher labor rates).

Top-of-range plumbing (4-4.5x SDE). 30%+ revenue from water heater installs and replacements (recurring 8-12 year cycle). Service agreements / membership programs growing. Residential focus with established brand in growth metro. Second-tier service manager. Strong technician retention. 20%+ revenue from emergency calls. Sub-15% customer concentration.

Bottom-of-range plumbing (2.5-3x SDE). New-construction or commercial-only focus (project-based, lumpy revenue). Owner-as-master-plumber dependency. Limited service mix (drain cleaning only or service-only). High technician turnover. Aging customer base without active marketing engine. Single-customer concentration above 25% (often a builder or property manager).

Electrical, roofing, lawn/landscape, pest control

Electrical contracting: 2.5-4x SDE. Lower multiples than HVAC/plumbing because residential electrical is heavily project-based (panel upgrades, EV charger installs, new construction) with limited recurring revenue. Commercial/industrial electrical with maintenance contracts trades higher. PE consolidators: Service Logic, IES Holdings (publicly-traded acquirer at $IESC), CMS Mechanical Services. Top-of-range characteristics: 25%+ commercial/industrial maintenance contracts, second-tier journeyman lead, sub-20% concentration. Bottom-of-range: residential project-only, owner-as-master-electrician dependency.

Roofing: 2-3.5x SDE. Among the lowest of the trades because roofing is almost entirely project-based, weather-dependent, and storm-driven. Recurring revenue effectively zero for residential. Commercial roofing with maintenance contracts trades 0.5-1x higher. PE consolidators: Tecta America, Building Industry Partners, RoofConnect, CentiMark. Top-of-range characteristics: commercial focus with maintenance contracts, manufacturer certifications (GAF, Owens Corning Master Elite), strong storm-response infrastructure. Bottom-of-range: residential storm-chaser model with no brand permanence, owner sales-dependent.

Lawn/landscape: 2-3x SDE. Lower multiples reflect labor-intensive operations, weather seasonality, and limited route density premium for sub-$1M businesses. Recurring revenue from seasonal contracts: 40-60% typical. Active PE consolidators: BrightView (publicly traded), TruGreen (Roark Capital), Yellowstone Landscape (CIVC Partners), ProGreen (Caltius Equity Partners). Top-of-range characteristics: 60%+ recurring contract revenue, commercial focus, geographic density, year-round service mix (snow + landscaping). Bottom-of-range: residential mowing-only, single-region with seasonality, high labor turnover.

Pest control: 3-5x SDE. Highest recurring-revenue trade after HVAC service contracts. Quarterly service plans drive 70-85% of revenue. PE consolidation aggressive: Rollins (publicly traded, Orkin parent), Rentokil (publicly traded, acquired Terminix in 2022), Anticimex (Tikehau Capital portfolio), Aptive Environmental (FFL Partners). Top-of-range characteristics (4.5-5x SDE): 80%+ quarterly recurring revenue, sub-10% customer concentration, route density, residential focus in growth metro, sub-5% annual customer churn. Bottom-of-range (3-3.5x SDE): commercial focus with project-based revenue, single-region with weak brand, high churn.

Restaurants: 1.5-3x SDE (lowest in services)

Restaurants are among the lowest SDE multiples in the small-business universe: 1.5-3x for typical operations. The drivers compress on every dimension: high failure rate (industry restaurant 5-year survival is roughly 50%, well below B2B services), weak recurring revenue (almost entirely transactional), labor intensity, capital intensity (kitchen equipment, build-out), and SBA underwriter caution (banks know the failure rate). The SBA buyer pool is thinner because banks frequently decline restaurant 7(a) applications or cap loan-to-value below standard.

Within-restaurant premium and discount. Premium (2.5-3.5x SDE): franchise system with 5+ year operating history (national franchise relationships pre-qualify the business), real-estate-included or favorable long-term lease, high revenue per labor hour, unique concept defensibility, multiple-location operator (signals operator can scale). Discount (1-2x SDE): single independent concept, owner-as-chef dependency, expiring lease, weak online reviews, declining trend, high-failure-rate categories (full-service casual dining, themed concepts).

Franchise restaurants. Franchise restaurants trade at premiums to independents: 2.5-3.5x SDE typical for established franchise systems (McDonald’s, Subway, Dunkin’, Tropical Smoothie Cafe, Jersey Mike’s, Five Guys franchisees). The franchise system pre-qualifies operators, the brand has buyer recognition, and franchisor approval of the buyer creates a clear close path. Multi-unit franchisees (5+ units) trade higher (3-4x SDE) because the platform value justifies institutional buyer interest. Franchise restaurant deal volume is concentrated in private buyers and family-office portfolios; public consolidators include Flynn Group (largest U.S. franchisee operator), JAB Holding Company subsidiaries.

QSR and fast-casual versus full-service. Quick-service restaurants (QSR) and fast-casual concepts trade at higher multiples than full-service: lower labor intensity, faster table turns, more predictable margins. Multiple range: 2.5-3.5x SDE for franchised QSR. Full-service casual dining: 1.5-2.5x SDE. Fine dining: highly variable, often broker-only deals at 1.5-2.5x SDE on the underlying business plus separate value for liquor licenses where applicable.

Cross-reference. See our How to Sell a Restaurant guide for the restaurant-specific sale process. The biggest single driver of restaurant exit pricing is the lease — long-term, transferable lease at favorable rates can add 0.5-1x to the multiple; expiring or change-of-control-restricted lease can compress 0.5-1x or kill the deal entirely.

E-commerce: 1-2.5x SDE (revenue model dependent)

E-commerce SDE multiples in 2026 range from 1-2.5x for typical Amazon FBA or Shopify-DTC businesses, with brand-driven or subscription-driven e-commerce reaching 3-4x. The compression reflects platform risk (Amazon FBA suspensions and policy changes), supply chain risk (China sourcing exposure), low recurring revenue, and owner-dependency on marketing skills (the ‘person who runs the ads’ is often the actual asset). Active e-commerce aggregators — Thrasio, Perch, Branded, Foundry, Razor Group — saw significant 2022-2023 challenges that thinned this buyer pool, though specialty acquirers continue to operate in 2026.

Within e-commerce premium and discount. Premium (2.5-4x SDE): owned brand with trademark protection, diversified channel mix (Amazon + Shopify + wholesale), subscription/replenishment SKUs, 3+ years of history, defensible product moat (proprietary formulation, exclusive supply, regulatory barrier). Discount (1-1.5x SDE): single Amazon FBA listing, China-only sourcing with no diversification, owner runs paid ads personally, no email list or owned-audience asset, high SKU concentration risk (one product 80%+ of revenue).

Subcategories within e-commerce. Amazon FBA aggregator-style businesses: 2-3x SDE typical. DTC Shopify brands with email/SMS list: 2-3.5x SDE. Subscription e-commerce (replenishment SKUs with auto-renewal): 3-4.5x SDE. Niche specialty e-commerce with strong brand and SEO: 2.5-4x SDE. Drop-ship-only e-commerce (no inventory ownership): 1-2x SDE due to weak defensibility. Marketplace seller (eBay, Etsy, Walmart only): 1-2x SDE due to platform concentration risk.

Why e-commerce trades lower than B2B services. Despite often having similar gross margins, e-commerce trades at 30-50% lower SDE multiples than B2B services because: customer relationships are weaker (customer can switch in seconds vs months for B2B contracts), platform dependency creates step-function risk, marketing-skill-as-asset is hard to transfer, and the buyer pool is thinner (specialized e-commerce buyers are a smaller universe than general B2B services SBA buyers).

B2B services: 2.5-4x SDE

B2B services span a wide universe and trade at 2.5-4x SDE on average in 2026. The category includes commercial cleaning, facilities maintenance, security services, staffing/recruiting, business consulting, training, and specialty services like document destruction, uniform rental, and waste management. Multiple ranges depend heavily on recurring contract structure, customer concentration, and owner-personality dependence.

Top-of-range B2B services (3.5-4x SDE). Multi-year contracts (3+ years with auto-renewal) dominating revenue. Diversified customer base (sub-15% concentration, 50+ named customers). Documented service delivery process not dependent on owner. Second-tier ops manager. Recurring monthly billing. Defensible competitive position (geographic exclusivity, certification, specialized capability). 5-15% organic growth. Examples that often clear top-of-range: commercial cleaning with multi-year contracts, facilities maintenance with 1099 sub-contractor structure, document destruction routes.

Bottom-of-range B2B services (2-2.5x SDE). Project-based or month-to-month revenue. Customer concentration above 25%. Owner-as-rainmaker (sales come from owner’s personal relationships). Limited recurring contracts. Owner-personality-dependent service delivery. Examples that often land at bottom: management consulting, executive recruiting (retained search), one-off marketing project shops.

Specific subcategories. Commercial cleaning: 2.5-4x SDE (recurring contracts premium). Facilities maintenance / janitorial: 2.5-4x SDE (similar dynamics). Staffing/recruiting (perm placement): 2-3x SDE (transactional, owner-rainmaker). Staffing (long-term contract / temp): 2.5-4x SDE (recurring revenue premium). Security services (guard services): 2.5-4x SDE (multi-year contract premium). Document destruction: 3-4.5x SDE (high recurring revenue, route density premium). Uniform rental: 3-4.5x SDE (recurring revenue, capex premium). Specialty B2B consulting (industry-specific advisory): 1.5-3x SDE (highly owner-dependent).

IT MSP: 3-5x SDE (recurring revenue premium)

IT Managed Services Providers (MSPs) trade at 3-5x SDE in 2026, with premium businesses reaching 4.5-6x. The driver is high monthly recurring revenue (MRR) from contracted IT services: 60-90% of revenue typically recurring. PE consolidators are aggressive: Evergreen Services Group (Alpine Investors), New Charter Technologies (Oak Hill Capital), Thrive Networks (Court Square Capital), Ntiva (Pamlico Capital), Marcum Technology / CGI subsidiaries. Buyer pool depth has been growing through 2024-2026 as cybersecurity tailwinds drive sustained demand.

What drives MSP within range. Monthly recurring revenue percentage (high MRR = high multiple). Average revenue per user (higher ARPU customers = higher multiple). Customer concentration (sub-15% top-customer concentration adds 0.5x). Cybersecurity service mix (MSPs with security-focused offerings trade higher). Vertical specialization (MSPs focused on healthcare, legal, financial services trade higher than general SMB MSPs). Co-managed IT model (where MSP works alongside in-house IT) trades higher than break-fix legacy.

Top-of-range MSP characteristics (4.5-6x SDE). 85%+ MRR. 30%+ cybersecurity service mix. Sub-15% customer concentration. Documented stack (PSA, RMM tools standardized, e.g., ConnectWise PSA + Datto RMM + N-able). Second-tier ops manager / vCIO function not owner-dependent. Vertical specialization. ARR growth >10%. Compliance certifications (SOC 2 Type II, HIPAA-compliant).

Bottom-of-range MSP characteristics (3-3.5x SDE). Below 60% MRR (heavy break-fix legacy). Customer concentration above 25%. Owner-as-engineer dependency. Limited cybersecurity offering. Generic SMB customer base. Below-market ARPU ($75-125 per seat per month). High customer churn (>10% annually). Weak documented processes.

Marketing agencies, accounting/bookkeeping: 2-4x SDE

Marketing/digital agencies: 2-3.5x SDE. The compression vs other services reflects owner-personality dependence (clients often follow the agency owner), project-based revenue mix (SEO/PPC retainers being the recurring exception), and high employee turnover. Top-of-range (3-3.5x SDE) characteristics: 80%+ retainer revenue, vertical specialization (B2B SaaS, healthcare, e-commerce), 50+ active clients with sub-15% concentration, second-tier ops/account-management leader. Bottom-of-range (1.5-2.5x SDE): project shops, owner-as-pitchman, <5 active retainers, generalist positioning.

Accounting/bookkeeping practices: 2.5-4x SDE. Higher multiples than agencies because tax-season and monthly-bookkeeping create predictable annual recurring revenue. Active PE consolidation: Ascend (Alpine Investors), Citrin Cooperman (acquisition platform), Aprio, Withum — aggressively rolling up sub-$5M revenue practices. Top-of-range (3.5-4x SDE) characteristics: 70%+ recurring monthly bookkeeping clients, low-touch tax practice, second-tier CPAs not dependent on owner, software stack standardized (QuickBooks Online + Karbon or Canopy + tax software). Bottom-of-range (2-2.5x SDE): owner-as-CPA-only, tax-season-only revenue concentration, paper-based or non-standardized workflow.

Law firms: usually not SDE-multiple priced. Law firms typically price differently — revenue-based multiples (0.5-1.5x revenue), partner-buy-in structures, or net-asset-based depending on practice area. SDE-multiple framing applies in a few contexts: small estate planning practices, family law boutiques, niche transactional shops — where multiples land at 2-3.5x SDE. Most law firm exits are partner-buy-in, lateral merger, or wind-down rather than third-party sale. The buyer pool for SDE-multiple law firm exits is thin.

Healthcare services: 4-8x SDE (highest in the universe)

Healthcare services command the highest SDE multiples in the SBA-buyer and search-fund universe in 2026: 4-8x SDE depending on subcategory. The drivers stack: regulatory moat (state licensure for DDS, DVM, OD, MD), recurring patient relationships, fee-for-service revenue with predictable per-patient economics, aggressive DSO/MSO consolidation across multiple subcategories, and category tailwinds from aging U.S. demographics. The DSO/MSO platform competition for add-ons effectively sets a price floor that pulls SBA-buyer pricing up.

Dental practices: 4-6x SDE. Active DSO consolidation: Heartland Dental (KKR-backed, largest U.S. DSO with 1,700+ practices), Pacific Dental Services (1,000+ practices), Aspen Dental (1,000+ practices, Ares Capital portfolio), Smile Brands (Bright Health Group), Dental Care Alliance (Imperial Capital), MB2 Dental (Charlesbank Capital Partners), Mortenson Dental Partners (Quad-C Management). Multiples driven by: hygiene recall rate (>75% recall = top-of-range), specialist mix (ortho, endo, oral surgery in-house = premium), 1099 vs W-2 associate structure, PPO mix, geography, real-estate ownership/lease. Top-of-range (5.5-6x SDE): single-doctor practice with 4+ ops, established hygiene program, 70%+ insurance mix, major-metro location, real estate or favorable lease. Bottom-of-range (3.5-4x SDE): solo practitioner-dependent, weak hygiene recall, high Medicaid mix, declining patient base.

Veterinary practices: 5-8x SDE (highest of the healthcare segments). Highest multiples in the SBA-buyer healthcare universe. Active consolidators: Mars Veterinary Health (private, owns Banfield, BluePearl, VCA Animal Hospitals, NVA acquired in 2024 add-on), National Veterinary Associates / NVA (Mars portfolio after 2024), Pathway Vet Alliance (TSG Consumer Partners then sold to Mars subsidiary), Thrive Pet Healthcare (TSG Consumer Partners), Heart + Paw (Sentinel Capital Partners). Top-of-range (6-8x SDE): small-animal practice in growth metro, 30%+ wellness plan revenue, 4+ DVM team, in-house lab/imaging/dental, 60%+ recurring client visits, real estate or long lease. Bottom-of-range (4-5x SDE): rural mixed-animal practice, sole-DVM, declining patient base, weak hospital infrastructure.

Optometry practices: 4-6x SDE. Active consolidation: EyeCare Partners (Partners Group portfolio, largest MSO in optometry), MyEyeDr (Goldman Sachs / Olympus Partners), Total Vision (Centerbridge Partners), AEG Vision (Comvest Partners). Top-of-range (5-6x SDE): full-scope practice with optical retail, 4+ exam lanes, established medical eyecare beyond basic refraction, established managed-care contracts. Bottom-of-range (4-4.5x SDE): solo OD, refraction-and-glasses focus only, rural location.

Medical aesthetics, urgent care, MSO-friendly subcategories. Medical aesthetics (med spa): 4-7x SDE depending on physician oversight model and recurring revenue from injectables. Active consolidators include Schweiger Dermatology Group, Ideal Image (formerly L Catterton-backed). Urgent care: 4-7x SDE; MSO consolidators include American Family Care, MedExpress (UnitedHealth-owned). Physical therapy: 4-6x SDE; consolidators include Confluent Health (Athyrium Capital Management), Upstream Rehabilitation (Revelstoke Capital Partners), Athletico (BDT Capital Partners).

Retail and other consumer-facing services: 1.5-3x SDE

General retail (brick-and-mortar) trades at 1.5-2.5x SDE in 2026, reflecting compressed buyer demand for retail post-COVID and continued e-commerce competition. Specialty retail (high-end specialty, niche category leaders) can reach 2.5-3.5x SDE if the brand has defensibility. The retail buyer pool is thin: SBA buyers are cautious about retail (weak post-COVID failure rates), institutional buyers generally avoid the category, and strategic acquirers are limited to within-category consolidators. Lease terms drive a large portion of valuation variance — a long-term favorable lease can add 0.5-1x to the multiple.

Auto repair / collision: 2-3x SDE. Active consolidators: Caliber Collision (Hellman & Friedman / Leonard Green Partners), Service King (Carlyle Group portfolio, exit pending), Crash Champions (Clearlake Capital), Gerber Collision & Glass (Boyd Group, publicly traded). Top-of-range (2.5-3x SDE): collision repair with insurance-DRP relationships, multiple bays, certified for major manufacturers (Tesla, BMW, Mercedes), real estate. Bottom-of-range (1.5-2x SDE): independent mechanical-only with single owner-mechanic, dated equipment, weak DRP positioning.

Fitness studios: 1.5-3x SDE. Multiples reflect high member churn (5-7% monthly typical for boutique studios), franchise vs independent dynamics, and category-specific risk. Franchised fitness (Anytime Fitness, Orangetheory, F45, Pure Barre, Club Pilates franchisees) trade at 2-3x SDE because franchisor pre-qualification creates buyer pool. Independent boutique fitness: 1-2x SDE due to thin buyer pool and high churn risk. Big-box gym (independents): 1.5-2.5x SDE.

Self-storage and other specialty real-estate-attached. Self-storage trades fundamentally on real estate value plus operating cash flow rather than SDE multiple, but SDE-multiple framing applies to operating-only deals (where seller retains real estate). 4-7x SDE is typical for operating-only self-storage given the recurring revenue and low operational complexity. Self-storage active consolidators: Public Storage, Extra Space Storage, CubeSmart, Life Storage (publicly traded REITs), plus PE-backed platforms. Most self-storage exits are real-estate-included transactions priced on cap rates rather than SDE multiples.

Within-industry premiums: how to move up the multiple range

Within any given industry, the SDE multiple has a roughly 1.5-2x range from bottom-of-range to top-of-range. On a $500K SDE business, that’s the difference between $1.25M and $2.5M of headline price — literal life-changing money. The drivers that move you within range are operational rather than strategic: they require 12-24 months of intentional preparation but can compound into 30-50% better after-tax outcomes.

Driver 1: recurring revenue percentage. Moving from project-based to contract-based revenue adds 0.5-1x to the multiple in most industries. Concrete examples: HVAC business shifting from 20% service-agreement revenue to 50% adds 0.5-1x. IT MSP shifting from 50% break-fix to 80%+ MRR adds 0.5-1x. Lawn/landscape shifting from one-time mowing customers to year-round contracts adds 0.5x. Restaurant adding catering-contract or franchise-system anchor adds 0.3-0.5x.

Driver 2: customer concentration reduction. Moving from above-25% concentration to sub-15% adds 0.3-0.7x to the multiple. The mechanism: sub-15% concentration eliminates the single-customer-loss risk that compresses bank underwriting and PE diligence. Practical playbook: aggressive new-customer acquisition over 12-18 months, intentional volume reduction with the concentrated customer (counterintuitive but reduces risk-weighted revenue), diversification into new customer segments.

Driver 3: second-tier manager in place. Adding a real second-tier ops or service manager (not just an admin or scheduler) adds 0.5-1.5x to the multiple in trades and services. The mechanism: removes owner-dependency, expands buyer pool from SBA-only to include search funders and PE add-on programs. Practical playbook: identify 4-8 things only the owner does today, document as SOPs, hire or promote into those roles, run owner-out tests (30-day vacations) to prove the business survives.

Driver 4: clean books with monthly closes. Moving from messy bookkeeper-prepared annuals to CPA-prepared monthlies with reconciled bank statements adds 0.3-0.7x to the multiple. The mechanism: SBA underwriters and PE QoE providers can verify your numbers quickly, which prevents diligence re-trades. Practical playbook: 18-24 months of clean monthly closes, CPA-prepared annual statements, clean addback documentation.

Driver 5: documented growth. Showing 5-10% organic growth across the trailing 24-36 months adds 0.3-0.7x to the multiple. The mechanism: PE buyers underwrite to growth-rate-driven exit-multiple expansion; SBA buyers underwrite to growth-rate-supported debt service. Practical playbook: don’t coast in pre-sale years — run the business as if you’re building it for the next decade. Pre-sale revenue dips are catastrophic; pre-sale revenue growth is multiplied by the multiple.

Driver 6: defensible position. Industry-specific defensibility (manufacturer certifications, regulatory licenses, franchise system, geographic exclusivity, established brand) adds 0.3-0.7x. The mechanism: defensibility creates buyer-pool depth and reduces post-close competitive risk. Practical playbook: invest in certifications, brand-building, online-review reputation, formal franchise relationships in the 12-24 months pre-sale.

Within-industry discounts: what compresses your multiple

The factors below compress within-industry multiples by 1-1.5x in observed deal data. Some are fixable with 12-24 months of preparation; others are structural and signal a wait-or-discount decision rather than a fix-and-sell decision.

Compression 1: customer concentration above 30%. Single customer above 30% of revenue is the single biggest within-industry discount — typically 0.5-1x off the multiple, or push into earnout-heavy structures. The buyer’s assumption: if the concentrated customer leaves post-close, the deal economics collapse. Fixable in 12-18 months through aggressive diversification, but the diversification must be visible in the trailing-12-months data at sale time.

Compression 2: owner-as-key-person. Owner is the head of sales, the lead technician, or the customer-facing brand — compresses multiple by 0.5-1.5x. The buyer’s assumption: post-close transition risk is high, and the cash-flow stream may not survive owner departure. Fixable in 12-24 months through intentional delegation, but it’s the longest of the operational fixes.

Compression 3: declining trend. Trailing-12-months revenue declining vs prior-12-months by more than 5% compresses 0.5-1x or pushes the deal to wait. Buyer’s assumption: continued decline post-close changes the underwriting math. Some categories with macro headwinds (legacy retail, traditional print) trade at chronic decline-discounts. Fix is operational stabilization plus 12-24 months of growth before going to market.

Compression 4: capital structure / balance sheet issues. Tax liens, pending litigation, environmental issues, unpaid SBA loans, related-party debt — all create 0.3-1x compression depending on severity. Some are fixable (pay down debt, settle disputes); some are structural (environmental contamination requires remediation). Disclose early in the process — surprises in diligence destroy leverage.

Compression 5: thin financial reporting. No monthly closes, mixed personal/business expenses, no balance sheet reconciliations, no addback documentation — compresses 0.3-0.7x. Buyer’s assumption: if the financials look messy, the addbacks won’t survive scrutiny and the EBITDA/SDE will be revised down. Fixable in 12-18 months of CPA work.

Compression 6: lease / facility issues. Short-remaining lease (under 3 years), change-of-control termination clauses, lease rates above market, facility too small for current operations — can compress 0.3-0.7x or kill the deal. Restaurant, retail, and trade businesses with route bases are most exposed. Fixable through lease negotiation 18-36 months before sale.

Conclusion

SDE multiples in 2026 vary by industry by a factor of 4-5x — healthcare services lead at 4-8x, trades cluster at 2.5-5x, B2B services and IT MSP at 2.5-5x, restaurants and e-commerce at 1.5-3x, retail at 1.5-3x. The drivers are structural: recurring revenue percentage, fragmentation/buyer-pool depth, regulatory moat, capital intensity, growth tailwinds, and historic deal volume. Within any industry, the 1.5-2x range from bottom-of-range to top-of-range is driven by operational levers: recurring revenue mix, customer concentration, second-tier management, clean financials, documented growth, and defensible position. The owners who get top-of-range outcomes invest 18-24 months in the operational drivers before going to market. The owners who get bottom-of-range outcomes either don’t do the prep work or don’t know which buyer pool fits their industry and end up positioning to the wrong audience. Industry-specific consolidators — Wrench Group in HVAC, Heartland Dental in dental, Mars Veterinary Health in vet, Evergreen Services Group in IT MSP, Rentokil/Rollins in pest control — effectively set the SDE-multiple floor by competing with SBA buyers for high-quality add-ons in their categories. Knowing your industry’s active consolidators and pricing them against SBA-buyer alternatives is how you maximize your specific deal’s clearing price. And if you want to talk to someone who knows the consolidators personally and can match you to the right buyer for your industry, we’re a buy-side partner — the buyers pay us, not you, no contract required.

Frequently Asked Questions

What’s the SDE multiple for an HVAC business in 2026?

3-5x SDE for typical sub-$1M SDE HVAC businesses, with premium businesses (50%+ recurring service contracts, second-tier service manager, residential growth-metro focus, sub-15% customer concentration) reaching 4.5-5.5x. PE consolidators including Wrench Group, Apex Service Partners, Sila Services, and Authority Brands compete with SBA buyers for add-ons in this range, which pulls multiples up vs other trades.

Why do dental and vet practices trade at higher multiples than trades?

Three reasons: regulatory moat (state DDS/DVM licensure creates a buyer-pool filter), recurring patient relationships (60-80% of revenue from repeat visits), and aggressive DSO/MSO consolidation. Heartland Dental, Pacific Dental Services, Mars Veterinary Health, NVA, and EyeCare Partners are all running active acquisition programs that compete with SBA buyers, pulling multiples to 4-8x SDE depending on subcategory.

What’s the SDE multiple for a restaurant?

1.5-3x SDE typical, with franchise QSR reaching 2.5-3.5x and full-service casual dining at 1.5-2.5x. Restaurants compress on multiple dimensions: high failure rate (50% 5-year survival), thin SBA buyer pool, weak recurring revenue, capital intensity, lease risk. Long-term favorable lease and franchise system pre-qualification are the two biggest within-restaurant premium drivers.

What’s a typical SDE multiple for an e-commerce business?

1-2.5x SDE for typical Amazon FBA or Shopify-DTC businesses, with subscription/replenishment e-commerce reaching 3-4.5x and owned-brand specialty e-commerce reaching 2.5-4x. The compression vs services reflects platform risk, supply chain risk, low recurring revenue, and owner-dependency on marketing skills. The 2022-2023 e-commerce aggregator wave (Thrasio, Perch, Branded) thinned the institutional buyer pool but specialty acquirers still operate.

What’s the SDE multiple for an IT MSP?

3-5x SDE typical, with premium MSPs (85%+ MRR, 30%+ cybersecurity service mix, vertical specialization, sub-15% customer concentration, SOC 2 / HIPAA compliance) reaching 4.5-6x. Active consolidators include Evergreen Services Group, New Charter Technologies, Thrive Networks, Ntiva, with cybersecurity tailwinds driving sustained 2024-2026 demand.

What drives premium multiples within an industry?

Six operational drivers: recurring revenue percentage (project-to-contract shift adds 0.5-1x), customer concentration reduction (above-25% to sub-15% adds 0.3-0.7x), second-tier manager in place (adds 0.5-1.5x), clean books with monthly closes (adds 0.3-0.7x), documented growth (adds 0.3-0.7x), defensible position via certifications/franchise/brand (adds 0.3-0.7x). Each driver requires 12-24 months of preparation but compounds to 30-50% better outcomes.

What compresses multiples within an industry?

Customer concentration above 30% (compresses 0.5-1x), owner-as-key-person dependency (compresses 0.5-1.5x), declining revenue trend (compresses 0.5-1x), capital structure/balance sheet issues like liens or litigation (compresses 0.3-1x), thin financial reporting (compresses 0.3-0.7x), short or restrictive lease (compresses 0.3-0.7x or kills the deal). Most are fixable with 12-24 months of preparation.

How do PE consolidators affect SDE multiples in trades and healthcare?

PE consolidators effectively set a price floor in actively-consolidated categories. When Wrench Group, Apex Service Partners, Heartland Dental, or Mars Veterinary Health is willing to pay 5-7x EBITDA for a high-quality add-on, that translates to a 4-5x SDE alternative for SBA buyers, pulling SBA-buyer pricing up. Categories without active PE consolidation (small specialty retail, niche B2B consulting) have lower multiples because there’s no consolidator competition.

Should I report SDE or EBITDA for my industry?

Below ~$750K of normalized earnings, SDE is correct for almost every industry. Above ~$2M, EBITDA dominates. In the $750K-$2M zone, dual-track reporting maximizes buyer pool. Above $2M in healthcare, IT MSP, or B2B services, EBITDA is almost universal because the institutional buyer pool dominates. See our SDE vs EBITDA guide for the full framework. For a deeper look, see our guide on how to calculate seller discretionary earnings correctly.

How does customer concentration affect my multiple?

Sub-15% concentration gets you to top-of-range (no concentration discount). 15-25% gets you to mid-range. Above 25% compresses 0.5-1x. Above 40% can push the deal into earnout-heavy structures or kill it entirely. Concentration matters because the buyer’s assumption is that loss of the concentrated customer changes the underwriting math — particularly for SBA buyers whose lender DSCR depends on stable revenue.

Where can I find published SDE multiple data?

Business Reference Guide (BRG, Tom West / Business Brokerage Press, annual edition) is the most cited SDE multiple source for main-street and lower middle-market businesses. Pratt’s Stats database includes thousands of completed transactions with SDE multiple detail. BizBuySell’s sold-listing database publishes quarterly SDE multiple ranges by industry. GF Data covers the larger end of the LMM market with EBITDA multiples by size and sector. Industry trade associations (NHRA, NRA, AVMA, ADA) publish category-specific compensation and transaction data.

How long does it take to move my business up the multiple range?

12-24 months for most operational drivers. Recurring revenue shift: 12-18 months. Customer concentration reduction: 12-18 months. Second-tier manager in place: 12-24 months (longest of the fixes). Clean books with monthly closes: 18-24 months. Growth runway: ongoing. The compounding effect: a business starting at 3x SDE that addresses all six drivers can clear 4.5-5x at exit, which on $500K of SDE is $750K-$1M of additional after-tax proceeds.

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 $200K-$1M+) plus monthly retainers, run a 9-12 month auction process, and require 12-month exclusivity. We work directly with 76+ buyers — SBA-financed individuals, search funders, family offices, lower middle-market PE consolidators, and strategic acquirers — who pay us when a deal closes. You pay nothing. No retainer, no exclusivity, no contract until a buyer is at the closing table. We move faster (60-120 days from intro to close) because we already know which industry-specific consolidators are active and which SBA buyers fit your deal. You walk after the discovery call with zero hooks.

Sources & References

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

1. BizBuySell Quarterly Insight Report — BizBuySell quarterly small-business sale data including median SDE multiples by industry across thousands of completed transactions, the largest published dataset of sub-$2M SDE multiple ranges in the U.S.
2. GF Data Lower Middle-Market M&A Deal Database — GF Data subscription database tracking private LMM acquisition data including EBITDA multiples by size and industry, referenced by PE investment committees for benchmarking pricing across $1-50M EBITDA deals.
3. Pratt’s Stats Private Deal Database — Business Valuation Resources Pratt’s Stats database covering thousands of private business transactions with SDE and EBITDA multiple detail, used for industry-specific multiple benchmarking by valuation professionals.
4. U.S. Small Business Administration 7(a) Loan Program — SBA guidance on 7(a) loan program including $5M maximum loan and debt service coverage requirements that constrain SBA-buyer SDE multiples to roughly 3-4x in practice across most industries.
5. Heartland Dental Public Information — Heartland Dental as the largest U.S. DSO with 1,700+ supported practices, KKR-backed since 2018, illustrating the active dental consolidation that pulls dental SDE multiples to 4-6x.
6. Mars Veterinary Health Public Information — Mars Veterinary Health as the largest veterinary services consolidator (Banfield, BluePearl, VCA, NVA after 2024 acquisition), illustrating the buyer-pool depth that supports 5-8x SDE multiples in vet practices.
7. Rentokil Initial 2024 Annual Report and Investor Materials — Rentokil Initial public-company financial filings including the Terminix acquisition (closed 2022) and ongoing acquisition strategy, illustrating pest control consolidation dynamics that support 3-5x SDE multiples in pest control.
8. Bureau of Labor Statistics Industry-Specific Wage Data — BLS OEWS industry-specific wage data referenced for replacement-manager salary normalization in EBITDA conversion, with materially different benchmarks across NAICS codes that affect SDE-to-EBITDA translation in industry valuation.