Module IV· ExitIntermediate
Question
Which exit multiples are typically expected in the middle market?
Answer
What
Exit multiples in the middle market in 2024, by sector:
| Sector | EV/EBITDA range |
|---|---|
| Software / SaaS | 12–18x (top-quartile 20x+) |
| Healthcare services | 10–14x |
| Tech-enabled services | 9–13x |
| Middle-market industrials (stable) | 7–9x |
| Machinery | 7–10x |
| Consumer goods / brands | 8–11x |
| Construction suppliers | 5–8x |
| Distribution / logistics | 6–9x |
The sector multiple is the anchor — company-specific adjustments are usually ±1.0–1.5x.
Deep diveShow more details
Premium factors (+)
| Factor | Premium |
|---|---|
| EBITDA above $50m | +0.5–1.0x |
| Recurring revenue above 70% | +1.0–2.0x |
| International reach | +0.3–0.8x |
| #1/#2 market position | +0.5–1.0x |
| Strategic fit for the buyer | +1.0–3.0x (synergy premium) |
Discount factors (−)
| Factor | Discount |
|---|---|
| Customer concentration above 30% top-3 | −0.5–1.5x |
| Cyclicality (construction, auto) | −0.5–1.0x |
| Geographic concentration (domestic-only) | −0.3–0.5x |
| Family-owned (less standardized DD) | −0.3–0.8x |
Pitch tip
Question: "What would be the maximum multiple in your sector?"
Answer: "In sector X the market range is A–B. For our target I would assume the median (Y), because [specific factors]. Upside of Z, but that presumes a strategic premium." A range plus your own assumption plus a rationale = a professional answer. Avoid a single-point estimate without a sensitivity"