EBITDA multiples by industry in the DACH Mittelstand, as of Q3/2026

An EBITDA multiple (also EV/EBITDA multiple or valuation multiple) is a valuation ratio that sets the enterprise value against operating earnings before interest, taxes, depreciation and amortisation (EBITDA). The formula is:

In M&A practice the multiple is applied the other way round: you multiply a company's adjusted EBITDA by a multiple that is customary for the sector to estimate the enterprise value. EBITDA multiples are the most widely used valuation metric in transactions in the DACH Mittelstand, because they make companies of different size, legal form and depreciation policy comparable.

EBITDA multiples are determined by sector, because different sectors have different risk and growth profiles. A software company with predictable recurring revenue justifies a higher multiple than a project-based trades business with volatile earnings. The table below shows the current valuation ranges for 20 industries.

The multiples published in PwC studies, FINANCE magazine barometers and PitchBook reports are based mostly on large-cap transactions, listed peer groups and Bloomberg databases. The EBITDA multiples shown there for sectors such as machinery or IT services are often 8x to 12x. In the DACH Mittelstand with adjusted EBITDA between €0.5m and €5m, things look different. According to the DUB KMU-Multiples Q3/2026, machinery sits at 4.6x to 6.0x in the small cap segment and IT services at 6.6x to 8.5x. Machinery is therefore around half below, IT services around a quarter. There are structural reasons for this.

Three discounts are the main cause. The size discount reflects lower diversification and limited access to institutional buyers and lowers the multiple by 1.0x to 2.5x against the large-company benchmark. The illiquidity discount prices in the fact that shares in an owner-managed Mittelstand company cannot be traded daily and that the exit typically takes four to seven years. Concentration risk on the customer, supplier or staff side (top 3 customers above 30 percent, dependence on the owner-CEO) pushes the multiple down by a further 0.5x to 1.5x.

On top come DACH-specific factors that Anglo-Saxon comparison studies do not capture. The master craftsman requirement (Meisterzwang) in regulated trades (plumbing and heating, electrical, metalwork) ties the business to a single licensed person and creates a hard continuity gap in a sale. High owner dependence in many family businesses means that customer relationships, pricing and key decisions sit with the founder. And the typical retention of earnings on the balance sheet in the Mittelstand (retained profits of the last 20 years, non-operating real estate, excess cash) distorts EBITDA upwards as long as it is not adjusted.

The backdrop is a wave of successions. By the end of 2029 around 545,000 of 3.87 million Mittelstand companies are aiming for a succession, around 109,000 per year (KfW Research, 2026). For the narrower period 2026 to 2030, a succession is due for around 186,000 companies in Germany (IfM Bonn, 2025). This supply meets an active buyer market: how the private equity deal flow and the sector multiples relate to each other decides the realistic range per sector and size class.

A concrete example: a machinery maker with €3m EBITDA, a 20 percent export share and an owner-managed family business is typically traded in DACH today in the small cap band of 4.6x to 6.0x (as of Q3/2026). Large-cap values for the same sector are clearly higher. The difference is not irrational, it is the sum of size discount, illiquidity discount and owner risk. Anyone who ignores these structural discounts negotiates on the wrong benchmarks and will be disappointed in the bidding process at the latest.

No serious buyer pays a multiple on reported EBITDA. The basis for negotiation is always normalised EBITDA, also called adjusted EBITDA. I see the following five adjustments in almost every owner-managed company in the DACH Mittelstand.

1. 1. Market-rate salary for the shareholder managing director

   Many owners pay themselves either above-average salaries (tax optimisation via the GmbH) or below-average ones (retaining earnings in the company). In a sale, the salary is adjusted to a market-rate managing director's pay, typically €150k to €250k a year depending on size and sector. For a company with €1.5m EBITDA, this adjustment alone can move EBITDA up or down by €100k to €300k and change the purchase price by €0.5m to €2.0m.

   Example: the owner of a fire safety business earns €320k. A market comparison gives €180k for a comparable position. Add-back to EBITDA: €140k. At a 6.0x multiple, the purchase price effect is +€840k.

2. 2. Rent paid to the shareholder for related property

   The operating property often belongs to a separate property GmbH or to the owner privately. The rent paid is often 30 to 60 percent above or below market, depending on the tax structure. In the valuation model the rent is adjusted to market level, documented by an expert appraisal or independent comparable rents. The adjustment matters twice: it affects EBITDA and the later separation of property company and operating company.

   Example: a manufacturing business pays €240k rent to the owner family. Market rent according to the appraisal: €150k. Add-back: €90k, multiple effect €540k at 6.0x.

3. 3. One-off effects and items from other periods

   These include Covid support (KfW grants, bridging aid, short-time work refunds), insurance payouts, litigation costs and income, amortisation from earlier acquisitions, gains from the sale of non-operating assets and one-off restructuring costs. Each of these items is stripped out, because it does not reflect sustainable earnings power.

   Example: a trading business shows EBITDA €280k higher in FY 2023 because of Covid support. This is deducted to arrive at run-rate EBITDA.

4. 4. Family members on the payroll without an operational role

   The spouse as a mini-job secretary on an €80k annual salary, the son as an authorised signatory without a fixed role, the partner as an external consultant on a fixed monthly fee: these positions are examined critically in due diligence. The buyer assumes these costs fall away after the takeover and adds them back in full to adjusted EBITDA. Clean documentation is important: who does what, which activity will fall away after the sale and which will remain.

   Example: three family members with €220k payroll costs in total, of which around €140k without an operational role. Add-back €140k, which at an IT services multiple of 7.0x adds €980k in value.

5. 5. Non-operating assets and excess cash

   Legacy real estate, a classic car fleet, life insurance policies, securities portfolios held by the GmbH, cash and bank balances beyond operating working capital needs: none of this belongs to the operating base. In the valuation model these assets are valued separately and added to the enterprise value as a cash position. Important: the minimum cash requirement (normalised working capital) stays in the company, the excess goes to the seller as an additional part of the purchase price.

   Example: a GmbH with €2.8m cash, operating requirement €600k. Excess cash of €2.2m goes to the seller on top of the equity value.

In practice these five adjustments add up to an EBITDA adjustment of 15 to 30 percent in typical DACH family businesses. If you prepare the normalisation properly, you argue with documented figures and shift the negotiation in your favour. If you go into the process unprepared, you lose multiples. More on the practical side in my guide EBITDA adjustment and normalisation (in German).

The formula enterprise value = EBITDA × multiple only tells half the story. Between the multiple-based starting valuation and the purchase price the seller actually sees in the account on closing day lie five structural price bridges. They decide whether a nominal multiple of 6.0x becomes a real multiple of 5.2x or 6.5x.

In this example the nominal multiple of 7.0x equals a cash-at-closing ratio of 4.9x EBITDA. Of the remaining 2.1x, 1.7x are deferred or at risk, the other 0.4x goes as net debt less cash. Anyone who only looks at the multiple in negotiations and ignores the price bridge is regularly disappointed. A sound indication takes all five components into account and values the seller's real, risk-adjusted cash inflow. The steps from a multiple-based valuation to a binding price are summarised in my guide to purchase price determination (in German).

Multiples are the dominant method in M&A practice in the DACH Mittelstand, but they are not the only valid valuation method. Depending on company size, sector and reason for the valuation, other methods complement or replace the multiple valuation. The overview below shows when each method is worth adding.

In practice, serious valuers combine at least two methods. An IT service provider with €2.0m EBITDA is typically valued by EBITDA multiple (7.0x = €14.0m) and by DCF (€13.2m at 9% WACC and 2% terminal growth). The range of €13.2m to €14.0m serves as the negotiation corridor. Applying the methods in isolation risks fixing price points that the second method does not support. For a detailed comparison of the methods including a decision matrix, see the detailed methods comparison (in German). For applying the DCF method in the Mittelstand, my guide DCF for the Mittelstand (in German) gives a practical step-by-step walkthrough.

After the sector, company size is the second most important factor for the level of the multiple. The so-called size premium means that larger companies are systematically valued higher. The table below shows the EBITDA ranges by size class for three example sectors (as of Q3/2026):

Data basis: DUB KMU-Multiples (aggregated market estimates from M&A advisory firms in the DACH region), as of Q3/2026. Preparation and smoothing: SourcingClub.

The size premium has several causes. Larger companies have diversified customer bases, professional management structures and reliable reporting systems, and they are accessible to institutional investors (private equity, family offices). For smaller companies with EBITDA below €1m, the buyer universe is often limited to strategic buyers and wealthy individuals, which caps demand and therefore the multiple.

Calculating company value with the EBITDA multiple takes three steps:

For a more detailed calculation that covers all value drivers, I offer a professional indicative valuation for SMEs through SourcingClub.

Valuing a company with multiples is not a mechanical exercise. Four central factors determine where a specific company sits within the sector range. Understanding these drivers matters to buyers and sellers alike.

1. Company size

Larger companies achieve systematically higher multiples. For IT services, the range in the micro cap segment (under €5m revenue) is 5.5x to 6.8x, in the mid cap segment (over €50m revenue) 7.6x to 10.0x (as of Q3/2026). The reasons: a broader customer base, more professional management structures, lower concentration risks and greater appeal to institutional investors. This so-called size premium is one of the most consistent effects in company valuation.

2. Revenue growth

Organic growth is the strongest single driver of higher multiples. Companies with a CAGR above 10 percent achieve on average 1.0x to 2.0x higher multiples than stagnating peers. In SaaS, the Rule of 40 is the benchmark: revenue growth plus EBITDA margin should add up to at least 40 percent. Fast-growing companies signal scaling potential and market relevance to the buyer.

3. Recurring revenue

The share of recurring or contractually secured revenue has a disproportionate effect on valuation. A facility management company with 80 percent framework contracts is valued higher than a project business with comparable EBITDA. In software, investors draw a strict line between one-off licence revenue and subscription models. The latter can raise the multiple by 2x to 4x.

4. Owner dependence

The more a company depends on its founder or managing director, the lower the multiple. Buyers check systematically whether the company has a solid second management level, whether customer relationships are institutionalised and whether processes are documented and scalable. Owner-managed Mittelstand companies that go through professional sale preparation can raise their multiple by 0.5x to 1.5x through targeted measures.

Further value-relevant factors include customer concentration (top 5 customers below 30 percent of revenue is ideal), competitive position in the relevant market, regulatory barriers to entry, the quality of financial reporting and future potential through digitalisation or sustainability. Investors in the deal origination process weigh these factors systematically to narrow the range for a specific target.

Multiple-based valuations use two earnings figures that are often confused:

In M&A practice, EBITDA has become the more common reference figure. It removes accounting distortions from different depreciation policies and makes companies easier to compare. For capital-intensive sectors such as industrial services or machinery, however, the difference between EBIT and EBITDA multiple is considerable and has to be taken into account when reading the figures.

An example: a machinery company with EBIT of €1.0m and depreciation of €0.5m has EBITDA of €1.5m. At an enterprise value of €8.0m this gives an EV/EBIT of 8.0x, but an EV/EBITDA of only 5.3x. The same enterprise value, two very different multiples. The values in the table refer to EV/EBITDA throughout.

Important: EBITDA has to be adjusted before a multiple is applied. Common adjustments cover a market-rate owner salary, one-off costs (litigation, relocations), non-operating expenses (private car, travel costs) and income and expenses from other periods. Adjusted EBITDA is the basis of every serious valuation.

The trend column in the industry table shows the change against the previous quarter (Q2 2026). It is based on the average of the three segment midpoints (micro, small, mid cap) per sector. How to read it:

Important: the trends describe market averages. A very well positioned company in a sector with a falling trend can still be valued at the top of the range or above. Conversely, a rising sector trend does not protect against low valuations where a company has individual weaknesses.

In the quarterly comparison Q2 to Q3 2026 the market moves little. The table below shows the largest changes per sector in the mid cap segment (midpoint of the range):

Data basis: DUB KMU-Multiples (aggregated market estimates from M&A advisory firms in the DACH region), as of Q3/2026. Preparation and smoothing: SourcingClub. Shown is the EBITDA multiple per sector in the mid cap segment, midpoint of the range, Q2 to Q3 2026.

The quarterly comparison Q2 to Q3 2026 shows a calm picture. Software and SaaS eases across all three size classes, as does telecommunications, and IT services falls at the mid cap end from 9.0x to 8.8x. Nursing and care services and business services gained, as did healthcare in the mid cap segment. Since the start of the year the level across all 60 segments has stayed largely stable; the strongest rise is IT services at the mid cap end (+0.5x since Q1). For owners in segments that are easing: if you are planning a sale, do not wait for the market to recover, but prepare the sale process actively and maximise your individual value drivers.

I show all moves from 60 segments, the development since Q1 and the smoothing methodology in the article EBITDA multiples DACH Q3/2026: development by sector (in German).

The three examples below illustrate how EBITDA multiples are applied in practice. All values are simplified and for illustration only.

The examples show that the multiple is not a fixed number. It reflects the individual quality of the company. Between the lower and upper end of the sector range, valuations can differ by 100 percent and more. A sound assessment always requires an analysis of the company-specific value drivers.

For a more detailed look at the different valuation methods (in German) I recommend my separate guide, which covers DCF and net asset value approaches alongside the multiple method.

Although the DACH region is seen as a single M&A market, there are country-specific differences that have to be taken into account in the valuation:

For owners and sellers

Multiples are a first reference point for pricing. Sellers should prepare their adjusted EBITDA carefully and understand how the main value drivers affect the multiple. Professional preparation can raise the achieved multiple considerably. Three concrete measures: first, reducing owner dependence by building a second management level. Second, increasing the share of recurring revenue through framework and maintenance contracts. Third, increasing transparency through clean reporting. More on this in my guide selling a company (in German).

For PE investors and corporates

Buyers use multiples as a screening criterion and basis for negotiation. What matters is adjusting EBITDA and placing it in the sector context. For deal origination strategies, what counts is reaching suitable targets early and directly, before a sale process begins. Through SourcingClub I support the systematic identification and pre-qualification of targets below the auction radar.

Demand for Mittelstand targets remains high. Private equity and VC investors invested around €15.69bn in German companies in 2025, an increase of 4 percent and the highest level since 2021. Of this, around €10.66bn (68 percent) went into buy-outs. In total, around 897 German companies received equity capital. This capital pressure supports multiples at the upper end of the range, especially for targets with a high recurring share and low owner dependence.

Source: BVK (2026). Highest level of annual investment since 2021.