Professional Services Acquisition Multiples
Professional services — agencies, consultancies, accounting, legal-adjacent — is where founder dependency does the most damage to valuation. The sector median is 4.8x EBITDA, but the spread inside the sector is almost entirely a story about whether the business runs without the founder.
EBITDA Multiple Spread
Lower middle market, $2M–$50M EV
Median Multiple — 6 Year Trend
Annual median EBITDA multiple
Multiple by Deal Size Band
Median EBITDA multiple per EV band
Buyer Mix
Share of closed deals by buyer type
Sector thesis
Professional services is the most accessible sector for first-time acquirers and search funds — which is also why the bottom of the multiple range is so soft. A $2–5M EV agency where the founder is still the senior strategist transacts in the 3.0x–3.8x range. The same agency, with the founder out of delivery and a productized retainer book, clears 5.5x+.
The structural ceiling in the sector is roughly 7x EBITDA. Above that, buyers want either software leverage on top of services or genuine IP — at which point the comparable set shifts toward tech-enabled services or SaaS, not pure services.
Current benchmarks
Median professional services EBITDA multiple is 4.8x in 2026. The $2–5M EV band is dominated by search and independent buyers and clears 3.8x; the $15–35M band, dominated by PE add-ons, clears 5.8x.
Diligence averages 84 days. The bottleneck is almost always quality of earnings — services businesses commonly have project revenue recognized on cash or milestone basis that needs to be normalized for the acquirer.
Frequently asked
What EBITDA multiple do professional services firms sell for?
Lower middle market professional services transacted at a median 4.8x EBITDA in 2026, with a range of 3.2x to 6.9x. The spread is driven primarily by founder dependency and recurring revenue ratio.
Can a founder-dependent services business still sell?
Yes, but at a discount of typically 1.5–2 turns of EBITDA versus a comparable operator-grade business, and usually with a 24–36 month earnout. The cleanest valuation lift comes from spending 12+ months removing the founder from delivery before going to market.
How does retainer revenue affect valuation?
Recurring retainer revenue above 50% of total is the single biggest premium driver in services. It moves the buyer underwriting from project economics to recurring economics and typically adds 1+ turns of EBITDA.
Related sectors
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