An EBITDA multiple is the ratio of a company’s enterprise value to its EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation). It is the most widely used valuation metric in mid-market M&A — expressing how many years of earnings a buyer is paying for the business.
How the EBITDA Multiple Works
The formula is straightforward:
EBITDA Multiple = Enterprise Value ÷ EBITDA
If a business generates $5 million in EBITDA and sells for $30 million in enterprise value, the transaction has occurred at a 6x EBITDA multiple. The multiple tells you — and any prospective buyer — how the market is pricing each dollar of earnings.
EBITDA multiples are used in two ways in M&A:
- As a valuation benchmark — to determine what a business is worth by comparing it to precedent transactions and comparable companies in the same sector
- As a sanity check on deal terms — to assess whether the agreed enterprise value is consistent with market pricing for similar assets
EBITDA Multiple Ranges by Sector (Asia Pacific, 2026)
EBITDA multiples vary significantly by sector, growth rate, and business quality:
| Sector | Typical Range | High End |
|---|---|---|
| Technology / SaaS | 8–15x | 20x+ |
| Healthcare / Pharma | 8–14x | 18x+ |
| Financial Services | 6–12x | 15x |
| Professional Services | 5–9x | 12x |
| Accounting / Consulting | 5–8x | 10x |
| Staffing / Recruitment | 4–8x | 10x |
| Healthcare (GP/Allied) | 5–9x | 12x |
| Manufacturing | 4–7x | 9x |
| Distribution / Logistics | 4–7x | 9x |
| Retail / Consumer | 4–7x | 10x |
Ranges reflect mid-market transactions (enterprise value $10M–$500M) across Australia, Singapore, Hong Kong, India, Japan, and South Korea. High-growth, recurring revenue, and PE-backed businesses command premiums. Distressed or owner-dependent businesses trade at discounts.
As Daniel Bae, Founder & CEO of Amafi and former advisor on $30B+ of transactions, explains: “The EBITDA multiple a seller achieves depends less on the industry average and more on how the sale process is run. Competitive tension between multiple buyers is the single most reliable way to move an achieved multiple from the midpoint to the top of the range.”
What Drives EBITDA Multiple Expansion
Not all businesses in the same sector trade at the same multiple. The following factors push valuations toward the top of the range:
- Recurring revenue — subscription, contract, or retainer-based revenue commands a premium over one-time transactional revenue
- Revenue growth — businesses growing at 15%+ EBITDA typically achieve 2–4x multiple premium over flat businesses
- Low owner dependence — a business that runs without the founder is worth more than one that depends on them
- Diversified customer base — no single customer accounting for more than 15-20% of revenue
- High margins — EBITDA margins above 25% signal pricing power and operational efficiency
- Defensible market position — proprietary technology, regulated market access, or strong brand
- Clean financials — audited or reviewed accounts, clear quality of earnings
LTM vs NTM EBITDA: Which Denominator Matters
EBITDA multiples are quoted on either a trailing or forward basis:
- LTM (Last Twelve Months) — uses actual historical EBITDA; the most common basis for mid-market transactions because it relies on verifiable numbers
- NTM (Next Twelve Months) — uses projected EBITDA; more common in PE-backed transactions where financial projections are credible
For seller-negotiated transactions, LTM is the anchor. Buyers will adjust for normalised EBITDA — removing one-off costs, owner benefits above market compensation, and non-recurring items — to arrive at the quality of earnings figure they are actually paying for.
EBITDA Multiple vs Revenue Multiple
In some sectors — particularly software and technology — revenue multiples are used alongside or instead of EBITDA multiples, especially when businesses are pre-profit or deliberately investing for growth. A SaaS business with $10M ARR might be valued at 5x revenue ($50M enterprise value) regardless of its current EBITDA.
However, for most mid-market businesses with stable profitability, EBITDA multiple is the primary metric. Revenue multiples are more common in high-growth, venture-backed businesses rather than established, profitable SMEs.
EBITDA Multiple and Amafi’s Fee Structure
Amafi charges a success fee of 2% of enterprise value — no retainer, no monthly fees, no expenses. On a $20M enterprise value deal, that is $400,000. On a $50M deal, it is $1,000,000 — capped at $500,000 under Amafi’s fee structure. A well-run competitive process that moves your achieved multiple from 6x to 7x EBITDA on a $5M EBITDA business adds $5,000,000 to your proceeds — many times the advisory fee. Book a valuation meeting to understand where your business sits in the current multiple range.
Related Terms
- EBITDA — the earnings figure that forms the denominator of the multiple
- Enterprise Value — the numerator; total value of the business including debt
- Multiple Expansion — the increase in multiple achieved between entry and exit
- Comparable Company Analysis — using peer multiples to benchmark valuation
- Precedent Transactions — using historical deal multiples to benchmark valuation
- Quality of Earnings — due diligence on the earnings figure used in the multiple