Staffing Company Valuation Multiples: What Your Staffing Business Is Worth (2026)

Staffing company valuation looks deceptively simple on the surface. Multiples appear to land in a tight range — 0.3-0.6x revenue or 4-7x EBITDA — for the entire industry. The reality: that 2x spread between the bottom and top of the range is enormous in dollar terms. A $20M-revenue staffing company can sell for $6M (0.3x) or $14M (0.7x) depending on factors that don’t show up in headline revenue.

Buyers anchor on EBITDA, not revenue. A staffing firm with $30M revenue and 4% EBITDA margin generates $1.2M of EBITDA — which sells at 4-5x to a buyer ($4.8-$6M total enterprise value, or 0.16-0.20x revenue). A staffing firm with $20M revenue and 10% EBITDA margin generates $2M of EBITDA — which sells at 6-7x ($12-$14M, or 0.6-0.7x revenue). Same industry, same revenue range, but the higher-margin firm sells for 2-3x more in absolute price. Revenue multiples are a sanity check; EBITDA multiples set the price.

Specialty verticals command meaningful premiums. IT staffing (technology contractors), healthcare staffing (locum tenens, travel nursing, allied health), finance and accounting staffing, engineering staffing — all trade at higher multiples than commodity light-industrial or general clerical staffing. The reason: specialty staffing has higher gross margins (25-35% vs. 15-20% for commodity), longer client relationships, higher-skilled candidates with stickier placements, and stronger PE-backed consolidator demand.

Working capital intensity drives the diligence outcome. Staffing is a working-capital-heavy business. AR runs 60-90 days. Payroll runs weekly. The float between paying contractors and collecting from clients is funded by lines of credit, factoring arrangements, or PEO float. Buyers spend significant diligence time on AR aging, customer concentration in receivables, factoring agreements, and PEO/payroll funding setups. Problems here (concentrated AR, slow-paying customers, expensive factoring) compress multiples by 15-30% or kill deals entirely.

“Staffing companies are valued on EBITDA, not revenue — and the difference between a 4x EBITDA exit and a 7x EBITDA exit is rarely about the top line. It’s about specialty mix, conversion-fee revenue, AR quality, and customer concentration.”

Key Takeaways

• Staffing multiples: 0.3-0.6x annual revenue OR 4-7x EBITDA. Commodity light-industrial at the low end; IT/healthcare/finance specialty at the high end.
• EBITDA multiples are the dominant pricing method. Revenue multiples are a sanity check, not a determinant. Higher-margin firms sell for 2-3x more in absolute dollars than equivalent-revenue commodity firms.
• Temp-to-perm conversion fees command premium multiples. Firms with 15-25% of revenue from conversion fees trade 1-2 EBITDA turns higher than pure-temp shops because conversion revenue is 100% gross margin.
• Working capital intensity is the #1 diligence focus. AR runs 60-90 days. Customer concentration in AR, factoring arrangements, and PEO float setups all get scrutinized heavily by buyers.
• Major buyer types: large strategic staffing groups (Allegis, ASGN, ManpowerGroup, Robert Half, Kforce), PE-backed staffing platforms (Insight Global, System One, Beacon Hill), and PE direct buyers for specialty platforms in the $20-50M EBITDA range.
• Customer concentration is a hard underwriting limit: any single client over 20% of revenue triggers multiple compression of 10-25%. Over 35% concentration often kills the deal.

How staffing companies are valued

EBITDA is the dominant valuation metric in staffing M&A. Buyers underwrite the cash flow of the business, not the gross billings. EBITDA captures the actual profit after paying contractors, recruiters, internal staff, and operating costs. Typical multiples: 4-5x EBITDA for commodity light-industrial / general clerical, 5-6x for specialty production / mid-tier IT, 6-8x for premium specialty (healthcare locums, IT contract-to-hire, finance/accounting, engineering).

Revenue multiples are a sanity check, not a price. Revenue multiples (0.3-0.6x annual revenue) are useful for quickly screening transaction announcements but don’t reflect the actual cash flow buyers are buying. A high-revenue / low-margin commodity firm will appear ‘cheap’ on a revenue multiple basis but actually sells at the same EBITDA multiple as everyone else — the apparent revenue discount is just the consequence of low margins.

Adjusted EBITDA is what buyers actually pay on. Adjusted EBITDA = reported EBITDA + owner W-2 normalization + owner perks + one-time expenses (legal fees on litigation now resolved, one-time IT investments) + non-recurring contract losses + COVID-era anomalies. Realistic adjustments add 1-3 percentage points to reported EBITDA margin. Aggressive add-backs (recurring expenses dressed up as one-time) get challenged in QoE and reduce trust with buyers.

Gross margin is the leading indicator of EBITDA quality. Staffing gross margin = (revenue − direct labor costs) / revenue. Commodity light-industrial: 15-20%. General clerical / admin: 20-25%. IT staffing: 22-30%. Healthcare staffing: 25-35%. Finance/accounting staffing: 28-35%. Engineering staffing: 25-32%. Higher gross margin almost always translates into higher EBITDA margin and higher multiples.

Why specialty verticals command higher multiples

Specialty staffing has higher gross margins. IT, healthcare, finance, and engineering staffing operate at 25-35% gross margins vs. 15-20% for commodity light-industrial. The margin difference compounds: a $20M-revenue specialty firm with 30% gross margin and 12% EBITDA margin generates $2.4M EBITDA, vs. a $20M commodity firm with 18% gross margin and 5% EBITDA margin generating $1M EBITDA. At equivalent EBITDA multiples, the specialty firm sells for 2.4x more.

Specialty placements are stickier. An IT contractor placed at a Fortune 500 client for a 6-12 month engagement is harder to replace than a light-industrial worker. Healthcare locums physicians are placed in 90-180 day rotations with low substitution risk. Finance/accounting contractors at quarter-close or year-end have project-specific value that’s hard to commoditize. Stickier placements = more predictable revenue = higher multiples.

Specialty markets are less commoditized. Light-industrial staffing competes on price (clients can switch agencies for $0.50/hour). Specialty staffing competes on candidate quality, sourcing depth, and vertical expertise. Less price competition = better margin retention = higher predictability of EBITDA = higher multiples.

Active PE consolidation in specialty verticals. PE platforms have been actively rolling up specialty staffing for over a decade. IT staffing platforms include System One, Insight Global, Beacon Hill, Genuent, and others. Healthcare staffing platforms include AMN Healthcare, Cross Country Healthcare, and various PE-backed locum tenens platforms. The active consolidator demand creates competitive bidding for specialty firms in the $5-50M revenue range, which expands multiples.

Specialty buyers care about candidate sourcing and database depth. Beyond financials, specialty staffing buyers diligence the recruiter team, candidate database, and sourcing infrastructure. A firm with 50,000 vetted IT candidates in its ATS, 12 senior recruiters with 5+ year tenures, and proprietary sourcing channels is worth significantly more than a firm with the same revenue but a thin candidate database and high recruiter turnover. Make recruiter retention, candidate database depth, and sourcing methodology a clear part of your CIM — buyers reward operational depth with higher multiples.

Vertical sub-specialization can earn additional premium. Within IT staffing, sub-verticals like cybersecurity, cloud architecture (AWS/Azure/GCP), data engineering, and AI/ML staffing trade at multiples 1-2 turns higher than general IT contract staffing. Within healthcare, allied health (PT/OT/ST) and behavioral health staffing currently trade at premium multiples to general nursing locum tenens because of supply-demand imbalances. The narrower and more specialized your candidate niche, the higher the multiple — provided revenue is large enough to support a viable platform.

Temp-to-perm and conversion fees: the multiple booster

Conversion fees are pure-margin revenue. When a temporary contractor gets hired permanently by the client, the staffing firm typically charges a conversion fee — either a flat fee ($5,000-$15,000) or a percentage of the contractor’s annual salary (15-25%). The fee is collected once and has zero direct labor cost. 100% of the conversion fee flows to gross profit. Even after recruiting commission and overhead allocation, conversion fees typically run 60-80% margin.

Why buyers value conversion-fee revenue. Conversion fees signal placement quality (clients hiring contractors permanently means the placements are good) and indicate a contract-to-hire business model that’s harder to commoditize. Staffing firms with 15-25% of revenue from conversion fees trade 1-2 EBITDA turns higher than pure-temp shops. A pure-temp commodity firm at 4.5x EBITDA might trade at 6x with strong conversion-fee mix.

Conversion fees show up in the gross margin line. Buyers reading the income statement see the conversion fees through unusually high gross margin %. A pure-temp light-industrial firm runs 15-18% gross margin; a temp-to-perm firm with 20% conversion-fee mix can run 22-28% gross margin on the same blended revenue base. The margin gap is what buyers pay for.

How to position conversion-fee revenue in M&A. Break out conversion-fee revenue separately in CIM. Show: (a) total conversion fees by year for the trailing 3 years, (b) % of revenue from conversion fees, (c) average fee per conversion, (d) conversion rate (conversions per 100 active contractors). A practice with 25 conversions/year on 200 active contractors = 12.5% conversion rate, which is healthy. Below 5% suggests pure-temp and won’t earn the premium multiple.

Direct hire / permanent placement revenue is also pure margin. Beyond temp-to-perm conversions, some staffing firms have a separate direct-hire desk where they place candidates directly into permanent roles in exchange for a 20-30% placement fee on first-year salary. This revenue is also nearly 100% gross margin and supports premium multiples. Buyers like to see direct-hire revenue at 5-15% of total revenue — high enough to be material, not so high that the firm is mostly a recruiting agency rather than a staffing firm. Firms with 30%+ direct-hire mix are valued more like recruiting agencies (3-4x EBITDA) because the revenue is one-time per placement and harder to predict.

Working capital intensity: where deals get killed

Staffing AR runs 60-90 days. Clients pay staffing invoices on 30-60 day terms typically, but 60-90 days actual collection cycles are normal. Large enterprise clients (Fortune 500) often pay on 75-90 day cycles. The staffing firm pays contractors weekly or bi-weekly. The float between paying contractors and collecting from clients is funded by lines of credit, factoring arrangements, or PEO float.

Working capital is significant: 12-18% of revenue. A $20M-revenue staffing firm typically has $3-4M of net working capital tied up — mostly AR, less payroll liabilities. Buyers expect this working capital to come with the business at close (not be excluded), which means the working capital target in the purchase agreement (the ‘PEG’) is critical. Negotiating the PEG poorly can cost the seller $500k-$2M of cash at close.

Customer concentration in AR is a deal-killer. If 30% of your AR comes from a single client, the buyer faces concentration risk: a single late-paying or bankruptcy event blows up working capital. Buyers either: (a) reduce the multiple by 10-25% to compensate, (b) add an indemnification holdback for that client’s AR, (c) require AR insurance or PG, or (d) walk away. Customer concentration in revenue and AR is the single most-scrutinized issue in staffing diligence.

Factoring arrangements need careful disclosure. Many staffing firms factor receivables to fund weekly payroll. Factoring costs typically 1-3% of revenue. Buyers want to see: (a) the factoring agreement (rates, term, recourse vs. non-recourse), (b) historical factoring usage, (c) the factor’s relationship with key clients, (d) what happens to factoring at close (most are paid off and replaced with the buyer’s line of credit). Hidden factoring charges or undisclosed factor relationships cause major friction in diligence.

PEO and ASO arrangements add another layer of diligence. Many smaller staffing firms use a PEO (Professional Employer Organization) like Insperity, TriNet, or ADP TotalSource to handle payroll, benefits, and workers’ comp for their contractor workforce. The PEO arrangement creates joint employment, simplifies compliance, and reduces administrative burden — but buyers want to understand: (a) the PEO contract terms, (b) the cost of leaving the PEO post-close, (c) any embedded workers’ comp experience modifier issues, (d) whether the PEO is artificially inflating margins by hiding true labor costs. PEO arrangements that are well-documented don’t hurt valuation; opaque PEO setups can compress multiples by 5-10%.

Customer concentration: the underwriting limit

Single-customer concentration over 20% triggers multiple compression. Buyers apply concentration discounts based on industry-standard thresholds: 0-15% concentration = no discount; 15-25% = 5-10% multiple compression; 25-35% = 15-25% compression; over 35% = often deal-killer or major structural change (large escrow, earnout tied to client retention, indemnification holdbacks).

Why concentration matters more in staffing than other industries. Staffing client relationships are sticky but not contracted. Most staffing arrangements are based on master service agreements (MSAs) with no minimum volume commitments. A client can stop sending requisitions overnight. If your top client is 30% of revenue and they leave 6 months post-close, the buyer’s underwriting model breaks. Staffing buyers are particularly sensitive to this because they’ve all seen client losses kill platforms.

Top 10 customer concentration also matters. Beyond single-customer concentration, buyers look at top 5 and top 10 customer concentration. Top 5 over 50% = high concentration risk. Top 10 over 70% = very high. The math: if any one of the top 5 walks, you’ve lost 10%+ of revenue. Diversified firms (top 5 under 35%, top 10 under 55%) trade at premium multiples.

How to mitigate concentration discounts pre-sale. If you have time before sale, deliberately diversify: target adding mid-size clients (each <5% of revenue) over 12-24 months to dilute the top-client concentration. If you don’t have time, prepare strong evidence of client stickiness: contract length, MSA renewal history, client-specific contractor placement counts, communication cadence, and client-by-client growth trends. Buyers can be comforted on concentration if the data shows the relationship is structurally sticky.

Buyer types: who’s buying staffing companies

Strategic buyers: large staffing groups. The largest strategics include Allegis Group (Aerotek, TEKsystems — private), ASGN Inc. (NYSE: ASGN; Apex Systems, CyberCoders, etc.), ManpowerGroup (NYSE: MAN; Manpower, Experis, Talent Solutions), Robert Half (NYSE: RHI), Kforce (NASDAQ: KFRC), Kelly Services (NASDAQ: KELYA), and Heidrick & Struggles (NASDAQ: HSII) on the executive search side. Strategics typically pay 5-7x EBITDA for tuck-in acquisitions in the $5-50M revenue range, sometimes higher for strategic-fit specialty assets.

PE-backed staffing platforms. Large PE-backed platforms include Insight Global (Cinven), System One (Thomas H. Lee Partners / GTCR), Beacon Hill Staffing Group (Trilantic), Cross Country Healthcare (publicly traded but PE-style consolidator), and dozens of mid-size regional platforms. PE platforms typically pay 5-7x EBITDA for add-ons, sometimes 7-9x for strategic fits. They look for: (a) strong growth, (b) clean financials, (c) low customer concentration, (d) specialty focus aligned with their thesis.

PE direct buyers (platform deals). For staffing companies in the $20M-$50M+ EBITDA range, PE firms buy directly to create new platforms. Platform deals typically command higher multiples (7-10x EBITDA) because the buyer expects multiple arbitrage on the eventual exit. Recent platform deals in IT, healthcare, and engineering staffing have closed at 7.5-9x EBITDA. Below $5M EBITDA, PE direct buyers are rare — the deals are too small for institutional fund sizes.

Owner-operator and search fund buyers. For staffing companies under $5M EBITDA, owner-operator buyers (search funders, individual buyers using SBA + seller financing) become the typical buyer pool. They pay 4-5x EBITDA typically, structured with 60-75% cash + seller note + earnout. The headline price is lower than strategic/PE platform offers, but they’re often the only viable buyers for sub-$5M EBITDA staffing companies.

A worked example: $25M revenue IT staffing firm

Setup: IT staffing firm with $25M annual revenue. 300+ active contractors at any time. 60% revenue from contract-to-hire (with 18% conversion fees flowing through), 40% from straight contract. Top client: 18% of revenue (Fortune 500 financial services firm, 7-year relationship). Top 5 clients: 42% of revenue. Gross margin: 28%. EBITDA: $2.5M (10% margin). Net working capital: $4.2M (16.8% of revenue). Existing factoring line: $3M outstanding.

Method 1: revenue multiple. Range for IT contract-to-hire: 0.50-0.65x. $25M × 0.55-0.65x = $13.75M-$16.25M. The strong conversion-fee mix supports the high end of the range; the 18% top-customer concentration pulls down toward the middle. Mid-point: $14.5M.

Method 2: EBITDA multiple. Adjusted EBITDA after add-backs (owner W-2 normalization, $200k of one-time legal, $150k of one-time IT migration): approximately $2.85M. Range for IT contract-to-hire: 6-8x. $2.85M × 6-8x = $17.1M-$22.8M. The 18% top-customer concentration triggers approximately 10-15% discount — pulling the realistic range to $14.5M-$19.4M.

Likely outcome: $14M-$17M practice value. Strategic buyer (ASGN, Kforce, Robert Half, etc.) might pay $15-17M (5.3-6x EBITDA) given strategic fit and conversion-fee strength. PE-backed IT staffing platform (Insight Global, System One, Beacon Hill) might pay $14-16M (4.9-5.6x) as a tuck-in. The seller’s top-customer concentration is the main negotiable issue — expect a 15-20% indemnification holdback tied to that client’s 12-month retention post-close, plus a working capital target that requires the seller to leave $4M of working capital at close.

What moves staffing multiples up or down

Multiple goes up: specialty vertical with high gross margins. IT contract-to-hire, healthcare locum tenens, finance/accounting executive interim, engineering project staffing — all with 28%+ gross margin. Each layer of specialty adds 0.5-1 turn of EBITDA multiple. A pure-commodity light-industrial firm at 4.5x EBITDA might trade at 7x as a healthcare locum-tenens specialty firm with the same revenue.

Multiple goes up: temp-to-perm conversion-fee revenue 15%+. Conversion fees signal placement quality and command 1-2 turns of premium on EBITDA multiple. Pure-temp shops at 4-5x EBITDA become 5.5-7x when conversion-fee revenue exceeds 15% of total.

Multiple goes up: low customer concentration + long-tenure clients. Top customer under 15% + top 5 under 35% + average client tenure over 5 years = premium multiple. Buyers reward client stickiness with 0.5-1 EBITDA turn. The opposite (top customer over 25%, churn-heavy client base) costs 1-2 turns.

Multiple goes down: heavy customer concentration, expensive factoring, AR aging issues, outdated tech stack. Each is an underwriting concern. Top customer over 25% = 10-25% multiple compression. Factoring at 2.5%+ of revenue = 5-10% compression. AR aging over 90 days for 20%+ of receivables = 10-15% compression. Outdated VMS/ATS tech stack = 5-10% compression (buyer assumes integration cost). Stacked: a poor-quality commodity staffing firm can compress all the way to 3-3.5x EBITDA, well below the 4-7x range.

Common staffing valuation mistakes sellers make

Mistake 1: leading with revenue instead of EBITDA. Many staffing sellers anchor conversations on revenue (‘we’re a $25M firm’) rather than EBITDA (‘we generate $2.5M of adjusted EBITDA’). Sophisticated buyers ignore the revenue framing and immediately ask for EBITDA — and a seller anchored on revenue ends up disappointed when the buyer’s offer comes in at 5-6x EBITDA. Lead with EBITDA, gross margin, and conversion-fee mix in every conversation.

Mistake 2: aggressive add-backs that fail QoE. Staffing-specific add-backs that buyers commonly challenge: owner-related travel and entertainment beyond market norms, recurring ‘one-time’ legal fees, sales rep recruitment costs (treated as recurring overhead by buyers, not one-time), CRM/VMS/ATS migration costs that recur every 3-5 years. Stick to defensible add-backs: owner W-2 normalization, owner’s spouse on payroll without real role, true one-time litigation, true one-time office moves.

Mistake 3: not normalizing for COVID-era anomalies. 2020-2022 created enormous distortions in staffing P&Ls. PPP loan forgiveness, ERC credits, healthcare staffing surge revenue, IT remote-work boom. Buyers underwrite the trailing 36 months and want to see normalized run-rates — sellers who include unusually strong 2021-2022 revenue without normalization look like they’re hiding declining trends. Show 2019, 2020, 2021, 2022, 2023, 2024, 2025 separately with clear notes on each year’s anomalies.

Mistake 4: ignoring the working capital target until late in diligence. The working capital target (PEG) often gets negotiated in the final 30 days before close, when the seller has limited leverage. Get a draft PEG calculation done 60-90 days before LOI signing — calculate average net working capital for the trailing 12 months. Push for the PEG target to exclude factoring liabilities (which the seller pays off at close) and to use a 12-month average rather than a peak. A poorly negotiated PEG can cost the seller $500k-$2M of cash at close.

Conclusion

Staffing companies sell on EBITDA, not revenue — and the difference between a 4x exit and a 7x exit is rarely about the top line. Specialty mix (IT, healthcare, finance, engineering vs. commodity light-industrial), temp-to-perm conversion-fee penetration, customer concentration, working capital health, and AR quality are the factors that move multiples. A $20M-revenue commodity light-industrial firm at 4x EBITDA sells for $4-5M total enterprise value. A $20M-revenue specialty IT contract-to-hire firm at 7x EBITDA sells for $14-15M. Same top line, dramatically different valuations — because buyers underwrite cash flow quality, not gross billings. Get a personalized starting estimate at ctacquisitions.com/survey/ and validate with someone who has closed staffing M&A in your specific vertical before going to market.

Frequently Asked Questions

What is the typical multiple for a staffing company?

Staffing companies typically sell for 0.3-0.6x annual revenue OR 4-7x EBITDA. Commodity light-industrial trades at the low end (0.3-0.4x revenue, 4-5x EBITDA). Specialty staffing (IT, healthcare, finance, engineering) trades at the high end (0.5-0.7x revenue, 6-8x EBITDA). EBITDA multiples are the dominant pricing method.

Why are staffing revenue multiples so low compared to other industries?

Because staffing has low gross margins (15-35% depending on vertical) compared to most other industries (40-70%+). The revenue passes through largely as direct labor cost to contractors. Buyers underwrite EBITDA, and EBITDA is a small percentage of revenue in staffing — so revenue multiples appear low. The underlying EBITDA multiples (4-7x) are actually similar to many other service businesses.

How much premium do specialty staffing verticals command?

Significant. Commodity light-industrial trades at 4-5x EBITDA. IT staffing at 5.5-7x. Healthcare locum tenens at 6-8x. Finance/accounting at 6-7.5x. Engineering at 5.5-7x. The premium is driven by higher gross margins, stickier client relationships, less commoditization, and active PE consolidator demand in specialty verticals.

How do conversion fees affect staffing valuation?

Significantly. Conversion fees (one-time fees when temps get hired permanently) are nearly 100% gross margin. Staffing firms with 15-25% of revenue from conversion fees trade 1-2 EBITDA turns higher than pure-temp shops. A pure-temp firm at 4.5x EBITDA can trade at 6-6.5x with strong conversion-fee penetration. Break out conversion-fee revenue clearly in your CIM.

What customer concentration is acceptable in staffing M&A?

Top customer under 15% of revenue is ideal (no concentration discount). 15-25% triggers 5-10% multiple compression. 25-35% triggers 15-25% compression and often requires structural mitigation (escrow, earnout, AR insurance). Over 35% is often a deal-killer or requires major structural concessions. Top 5 customer concentration over 50% also triggers concentration discounts.

How do staffing buyers handle working capital in the deal?

Working capital is heavy in staffing (typically 12-18% of revenue). Buyers expect to acquire net working capital at close in line with a historical average target (the ‘PEG’). Negotiating the PEG carefully is critical — the seller leaves working capital at close equal to the PEG target. A PEG that’s too high costs the seller cash; a PEG that’s too low triggers a post-close shortfall payment.

What are the major strategic acquirers of staffing companies?

Major U.S. strategics include Allegis Group (Aerotek, TEKsystems — private), ASGN Inc. (NYSE: ASGN), ManpowerGroup (NYSE: MAN), Robert Half (NYSE: RHI), Kforce (NASDAQ: KFRC), and Kelly Services (NASDAQ: KELYA). Each has different vertical focuses — ASGN heavy IT, ManpowerGroup broad, Robert Half/Kforce finance and accounting, Kelly Services general staffing.

Who are the major PE-backed staffing platforms?

Major PE-backed staffing platforms include Insight Global (Cinven), System One (Thomas H. Lee Partners / GTCR), Beacon Hill Staffing Group (Trilantic), Cross Country Healthcare (publicly traded but PE-style consolidator), AMN Healthcare (publicly traded), and dozens of mid-size regional platforms in IT, healthcare, finance, and engineering verticals.

How does factoring affect staffing M&A?

Factoring is common in staffing because of weekly payroll vs. 60-90 day AR collection. Factoring rates run 1-3% of revenue. Buyers diligence the factoring arrangement carefully: (a) the agreement terms, (b) historical factoring usage, (c) recourse vs. non-recourse, (d) factor relationships with key clients, (e) what happens at close (typically the factor is paid off and replaced with buyer’s line of credit). Heavy factoring usage (over 2.5% of revenue) compresses multiples by 5-10%.

Should I sell to a strategic, a PE platform, or an owner-operator?

Depends on size and goals. For staffing firms with $20M+ EBITDA: strategic buyers and PE platform deals dominate, with multiples of 6-9x. For $5-20M EBITDA: PE-backed platform tuck-ins are most common, multiples of 5-7x. For under $5M EBITDA: owner-operator and search fund buyers, multiples of 4-5x. Strategics typically offer the highest headline price but require deep operational integration; PE platforms offer rollover equity upside; owner-operators offer cleaner exits.

How does AR aging affect staffing valuation?

AR aging is a key diligence focus. Healthy: under 60 days DSO, less than 5% of AR over 90 days. Acceptable: 60-75 days DSO, 5-10% over 90 days. Problematic: over 75 days DSO, more than 10% over 90 days. Problems here trigger working capital target adjustments (PEG goes up, seller leaves more cash) and can compress multiples by 10-15%.

Why is a calculator only a starting point for staffing valuation?

Calculators take revenue and EBITDA as inputs and produce a number. They can’t see vertical mix, conversion-fee penetration, customer concentration, AR quality, factoring arrangements, or buyer-specific strategic fit. A buyer-side QoE often adjusts seller-claimed EBITDA by 10-25% (especially for staffing-specific items like overtime accruals, sales commission accruals, and contingent labor liabilities). Use the calculator to set expectations; use the market (3-5 qualified buyers across strategics, PE platforms, and owner-operators) to set the price. Get a personalized estimate at ctacquisitions.com/survey/.

About the Author

Christoph Totter is the founder of CT Acquisitions, a buy-side deal origination firm headquartered in Sheridan, Wyoming. CT Acquisitions sources founder-led businesses for 75+ private equity firms, family offices, and search funds across the U.S. lower middle market ($1M–$25M EBITDA). Christoph writes about M&A from the perspective of someone on the phone with both sides of the deal table every week. Connect on LinkedIn · Get in touch