Service Company EBITDA & Valuation Multiples: 2025 Report

Last Updated: January 22, 2025

Our analysts compiled data on various private service company M&A transactions ranging from Q3 2022 to Q1 2025 to determine average valuation multiples. They drew from 4 private M&A databases as well as publicly-available data. (See Sources.)

We present these findings in the tables below, which cover both EBITDA multiples and revenue multiples and subdivide the data by level of earnings. Additionally, we offer context on the current M&A market for private services companies after the tables. 

Private Service Company Valuation Multiples: EBITDA

Private Service Company Valuation Multiples: Revenue

The sections that follow provide an executive-level summary of the current M&A environment for service companies in addition to considerations for selling a service company in these conditions. 

Understanding Service Company Valuations in 2025

Service companies saw volatile ups and downs between 2020 and 2025, with EBITDA multiples ranging from 4-13x during that time, depending on the sector and EBITDA level. Some industries have been relatively stable, and have even preserved their 2021 increases, particularly home services. 

For example, midsize HVAC companies have seen YoY increases in EBITDA multiples since 2022 (currently averaging ~8.5x) and haven’t seen much fluctuation when interest rates rose that same year. In contrast, sectors that thrived during the pandemic, such as marketing, saw more fluctuation – from 8-11.5x in 2021 to 4.5-7x in 2024.

M&A activity remains cautiously optimistic as of Q1 2025 across several industry sectors following interest rate cuts starting in September 2024. Despite the variance in service company valuation multiples across industries, we can make the following observations for services as a whole by amalgamating M&A market reports from industries in which service companies make up the majority of the market (e.g., legal, medical, and transportation):

• Home services companies are likely to see increases in valuations. Because of the volatility of the market over the last two years, buyers are increasingly turning to more inherently stabilized service companies in order to preserve their investment. Because of the good track record experienced by home services companies over the last four years, we predict that buyers (especially financially minded PE firms) will place a larger value in those companies in the coming years.

• Greater specialization results in higher valuation multiples. Businesses that focus on niche or uncommon audiences are less affected by upstart competitors and often accumulate first-mover advantages. In some cases, there is also greater demand for specialists rather than generalists.
  
• The next year will be challenging, but opportunities exist. While the larger economy continues to experience turbulence, private companies seeking a transaction still have an eager audience of private equity and strategic acquirers seeking the right deal. Owners that partner with well-connected M&A advisors or I-banks to run their process are seeing the most interest.  

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In my experience, selling your company is an overwhelming process, even for veteran business owners who have been dealmaking their entire career. The unpredictability of the macroeconomic environment and the intricacies of dealmaking pile on to an already emotionally taxing event. 

I have sold companies to both private equity firms and strategic buyers and am happy to offer advice to business owners seeking a third-party opinion. I can be reached via the link below or through the main contact page on this website.

• Valuation Multiples for Professional Services Firms (MicroCap)
• Company Valuation: How to Value a Service Business (Rogerson Business Services)
• Valuing Professional Service Firms (The CPA Journal)
• Determining Your Business’s Market Value (The Hartford)
• How to Value a Service Business Properly (Trafft)