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Private company EBITDA multiples are more difficult to obtain because private firms don’t publicly disclose their financials. However, there are several ways to access or estimate EBITDA multiples for private companies. These multiples are essential for valuing private businesses for mergers, acquisitions, or investments.

 

Here’s where to look and what to consider when evaluating private company EBITDA multiples.

 

Private Company Databases

Databases that track private company valuations are one of the best sources for private company EBITDA multiples. These platforms gather data from venture capital, private equity, and M&A transactions. The most commonly used databases include:

  • PitchBook: Provides valuation multiples across industries for private companies, especially in high-growth sectors like tech and healthcare. Their data includes buyout multiples and fundraising rounds.
  • PrivCo: Focuses on private company financials, valuations, and EBITDA multiples, particularly for U.S.-based companies.
  • CB Insights: Tracks startups and private companies, focusing on funding, valuation trends, and key financials.
  • CapIQ (Capital IQ): Offers comprehensive data on private companies, including transaction multiples, funding, and financials.

Look for:

  • Industry-specific EBITDA multiples to compare similar businesses
  • Deal multiples from recent private equity or venture capital investments
  • Growth-stage multiples (early-stage vs. mature companies) to understand how valuations change with growth

 

M&A Transaction Databases

Mergers and acquisitions (M&A) data provides real-world multiples based on actual deal prices for private companies. These multiples reflect what buyers are willing to pay. Some of the key M&A databases that track private company transactions include:

  • Preqin: Focuses on private equity deals and tracks EBITDA multiples from buyouts and exits.
  • MergerMarket: Offers data on global M&A activity, including multiples for private companies.
  • S&P Capital IQ: Tracks M&A deals and includes private company transactions with detailed EBITDA multiples.

Look for:

  • Transaction-based EBITDA multiples which reflect what buyers paid for private companies in recent deals
  • Industry and deal size filters to narrow down to relevant transactions
  • Premiums paid for strategic acquisitions, which might inflate the multiple

 

Private Equity and Venture Capital Firms

Private equity (PE) and venture capital (VC) firms regularly value private companies as part of their investment process. While they don’t publicly release financial details for most transactions, some firms publish reports and insights that include valuation trends. Examples of firms that might provide relevant information include:

  • Blackstone: Publishes annual reports that sometimes include private market valuation trends.
  • Sequoia Capital: VC firms often provide insights into how they value high-growth startups and private companies.
  • KKR: Offers whitepapers and market insights that include trends in EBITDA multiples for the companies they invest in.

Look for:

  • Industry insights on EBITDA multiples for sectors like tech, healthcare, or manufacturing
  • Benchmark data on valuation practices for growth-stage companies
  • Valuation frameworks for buyouts, which can help estimate EBITDA multiples for private firms

 

Valuation Firms and Consultants

Valuation consulting firms specialize in valuing private companies for sale, mergers, or investment. These firms produce industry reports and valuation guides that often include private company EBITDA multiples. Some key firms include:

  • Duff & Phelps (now Kroll): Provides valuation insights across sectors, with specific focus on private companies.
  • Houlihan Lokey: Offers valuation services and reports that include EBITDA multiples for private businesses.
  • BDO: Publishes market valuation reports that include private company multiples across various industries.

Look for:

  • Private company valuation reports by sector or business size
  • Multiples for middle-market and small businesses which typically differ from large public companies
  • Valuation adjustments for illiquidity or business risks specific to private firms

 

Industry-Specific Reports

Many industries have typical EBITDA multiples that are widely used for valuation. Industry-specific reports can be particularly useful if you’re looking for multiples in sectors like manufacturing, tech, or retail. These reports are often published by consulting firms, industry associations, or market research companies, such as:

  • IBISWorld: Publishes reports with industry benchmarks, including EBITDA multiples for different sectors.
  • PwC: Provides sector-specific valuation reports, often used by M&A advisors or consultants.
  • Deloitte: Publishes industry-specific reports on M&A and private company valuations.

Look for:

  • Typical EBITDA multiples by industry to use as a baseline
  • Industry trends that may impact valuations, such as changes in technology or regulation
  • Multiples for businesses of different sizes (small businesses vs. mid-sized private firms)

 

Comparable Private Company Analysis (Comps)

Comparable company analysis (comps) is widely used to estimate the value of private companies by comparing them to similar businesses. To perform a comps analysis, you need to gather financial and operational data from companies that are similar in terms of industry, size, and geography. You can access data for private companies through:

  • PitchBook: Provides detailed comps data for private companies, including EBITDA multiples.
  • S&P Capital IQ: Offers comps analysis for private companies, combining data from public and private sectors.
  • Private databases (PrivCo, Preqin): Track financials and multiples for private companies.

Look for:

  • Companies with similar size and business models to ensure your comparison is valid
  • Multiples in your specific geographic region as they vary by market conditions and country
  • Adjustments for growth rates and risk when comparing companies across different stages of development

 

Direct Data from Business Brokers

If you’re involved in buying or selling a small to mid-sized private business, business brokers can provide useful insights on typical EBITDA multiples for private firms. Brokers handle many private transactions and have access to real-world pricing data. Firms like:

  • BizBuySell: Provides insights on the sale prices and EBITDA multiples for small businesses.
  • Business Valuation Resources (BVR): Tracks private company sales and publishes data on EBITDA multiples across industries.
  • Sunbelt Business Brokers: Offers reports on business transactions and valuation multiples for private companies.

Look for:

  • Transaction-based multiples from similar business sales
  • Private company multiples by sector (e.g., retail, services, manufacturing)
  • Size-based multiples (small vs. medium-sized businesses) as these can differ significantly

 

Owner Interviews and Surveys

For smaller private companies, direct interviews with business owners or surveys from industry associations can help you estimate typical EBITDA multiples. Many private business owners have an idea of what their company is worth based on industry norms or recent transactions they’ve heard about. Industry associations like:

  • National Federation of Independent Business (NFIB): Publishes reports and surveys with valuation insights for small businesses.
  • Trade associations in specific industries (e.g., construction, restaurants, tech) may also conduct surveys of members and provide data on valuation multiples.

Look for:

  • Industry-standard multiples based on the business owner’s experience or recent sales in the market
  • Regional trends that affect private company valuations
  • Data from industry-specific surveys that offer realistic benchmarks for small businesses

 

What to Look for in Private Company EBITDA Multiples

Private company EBITDA multiples vary more than public companies due to less transparency and greater differences in profitability, growth rates, and risk. When evaluating private company EBITDA multiples, keep these factors in mind:

  • Industry: Multiples differ significantly by sector. High-growth sectors like tech or healthcare often have higher multiples than low-growth industries like manufacturing or retail.
  • Company size: Smaller businesses typically have lower EBITDA multiples due to higher risk and less liquidity.
  • Profitability: A business with strong EBITDA margins will command a higher multiple than one with low profitability.
  • Growth potential: Fast-growing private companies, especially those backed by venture capital, tend to have higher multiples.
  • Geography: Private company multiples can vary widely by region. Companies in emerging markets might have lower multiples than those in more developed economies.
  • Ownership structure: Family-owned or founder-led companies may be valued differently than those backed by private equity.

 

Conclusion

Finding EBITDA multiples for private companies requires a mix of data sources, including private company databases, M&A transaction platforms, industry reports, and valuation firms. The key is to use a variety of data points and tailor your analysis to the company’s industry, size, and risk profile. Make sure to consider adjustments for growth rates, profitability, and market conditions when applying EBITDA multiples to value private companies.