EBITDA Multiple

An EBITDA multiple is the ratio of a business's enterprise value (or sale price) to its EBITDA. It is the primary valuation benchmark used in Canadian small and mid-market business sales to compare transaction prices across different businesses.

EBITDA multiples vary by industry, deal size, growth trajectory, customer concentration, and buyer type. In Canada, multiples for lower middle market businesses typically range from 3x to 8x EBITDA, with technology and software businesses commanding the highest multiples (8x–15x) and restaurants and commodity businesses the lowest (2x–4x). Businesses with EBITDA above $2 million typically achieve multiples 20–30% higher than smaller businesses in the same industry.

Published multiple ranges represent medians across closed transactions and do not account for business-specific factors that can move a specific transaction 20–40% above or below the industry median.

See also: EBITDA, Enterprise Value, Comparable Transaction, Business Valuation.