The Multiple Sweet Spot for Gates & Fencing Businesses

How to peg a realistic valuation when barriers to entry are low and competition is everywhere. Finding the Multiple Sweet Spot for Gates & Fencing Businesses.

1. Market Snapshot: Easy to Enter, Hard to Scale

Low start-up hurdle. A ute, MIG welder and a yard get you trading for under AU $300k.

Local networks rule. Builders, strata managers and councils buy on reliability and warranty—brand carries little pricing power.

Commodity cost pressure. Steel price swings and DIY retailers (think Bunnings) squeeze gross margin unless you add design/automation IP.

Valuation takeaway: Buyers pay for repeatable cash flow, not “potential.” That caps multiples for micro-operators but rewards integrated fabricator-installers with visible margin control and site-risk discipline.

2. What the Market Actually Pays (Australia, mid-2025)

Business Profile Typical Deal Size (EV) Normalised EBITDA Margin Typical Multiple Strategic-Premium Band ¹

Owner-Driver Installer (≤ AU $500k revenue) AU $300k–600k 8 – 12 % 1.8 × – 2.3 × SDE n/a

Small Fabricator-Installer (AU $1–3 m revenue) AU $1 m–3 m 12 – 15 % 2.8 × – 3.5 × EBITDA 3.6 × – 3.8 ×

Integrated Manufacturer-Installer (AU $3–8 m revenue) AU $3 m–8 m 15 – 20 % 3.8 × – 4.8 × EBITDA 4.9 × – 5.2 ×

Industrial / Security Systems Specialist (AU $8 m+ revenue) AU $8 m–20 m 18 – 25 % 4.8 × – 5.5 × EBITDA 5.6 × – 6.5 ×

¹ Strategic premiums crop up in <10 % of deals—usually when a corporate buyer can bolt the target onto an existing network and strip overhead or secure niche IP. Banks ignore the premium piece, so only cash-rich acquirers pay it.

Sweet Spot Defined:

Integrated shops that manufacture to order and install on site (no wholesale channel) land in the high-3× to mid-4× range because:

Risk stays on-site. You cut steel only after a deposit, so WIP exposure stays low.

Cash conversion is fast. 40–50 % deposits mean the business often runs cash-positive.

Two bites at margin. You capture fabrication and install profit, buffering raw-material spikes.

3. Factors That Shift the Needle

Lever Reality Check Multiple Impact

Customer Concentration >35 % revenue from one builder/council –0.3 – 0.5 ×

Lease Security Shed on month-to-month lease –0.2 – 0.4 ×

Automation Capability In-house PLC / gate-motor expertise +0.4 – 0.6 ×

Warranty & Rework Call-backs >2 % of installs –0.3 – 0.6 ×

Documented HSEQ System ISO-lite manuals, SWMS library +0.3 – 0.5 ×

4. Climbing to the Top of Your Band

Secure a 3-year lease with renewal options—cheap insurance for the buyer’s bank.

Standardise quoting. Prove ±5 % gross-margin variance job-to-job.

Push service contracts. Annual gate-motor servicing adds annuity-lite revenue; every 5 % of steady service revenue lifts multiples ~0.2 ×.

Diversify accounts. Aim for no single customer above 15 % of revenue for the past two years.

Document your automation IP. A simple library of PLC configs shows transferability.

5. If You Might Attract a Strategic Buyer

Two-track info pack. Lead with bank-ready financials; follow with a one-pager quantifying their synergy upside (overhead cuts, geographic lock-out, extra capacity).

Move to exclusivity fast. Strategics dislike auctions once the fit is obvious.

Price upside via earn-out. Expect 70-80 % of consideration at the “Typical Multiple,” with the rest tied to actual synergy capture.

6. Timeline & Deal-Structure Realities

Runway: 7–13 months from listing to close; 90–120 days under LOI.

Financing Mix: Sub-AU $5 m deals still carry 10–20 % vendor finance or retention to offset warranty risk.

DD Hot Spots: WIP reconciliation, safety compliance (weld certs, guarding), hidden site liabilities (underground hits, asbestos).

Final Word

For 90 % of gates & fencing businesses, mid-3× to mid-4× EBITDA is the realistic strike zone once you clear AU $1 m revenue. Anything above 5× is gravy—reserved for the handful of strategic fits each year. Nail your lease, margins, automation story and customer spread now, then give yourself a 12-month runway to harvest the number you deserve.

Insight based on closed transactions, proprietary benchmarks and decades of brokerage know-how. For a confidential deep-dive on your own numbers, get in touch.