U.S. Private-Market Multiple Trends Every Australian Business Owner Should Know

Data source: Pepperdine Graziadio Business School Private Capital Markets Report 2024 unless stated. https://digitalcommons.pepperdine.edu/gsbm_pcm_pcmr/?utm_source=chatgpt.com

All figures are U.S. medians; expect Australian multiples to land about 0.5–1.0 turn lower because bank leverage is tighter and the buyer pool is smaller.

1 | Deals now need a longer runway

Median time from listing or broker engagement to close stretched to 7 – 13 months

Median time from first Letter of Intent (LOI) to close is 3.5 – 5 months

Implication: start grooming the company at least a year before you need liquidity—then budget another quarter for confirmatory diligence.

2 | Valuation multiples scale sharply with size

2a. Middle-market tiers – based on Earnings Before Interest, Taxes, Depreciation & Amortisation (EBITDA)

EBITDA band (U.S.) Median multiple × EBITDA

 < US $1 m 4.4×

 US $1–5 m 5.6×

 US $5–10 m 6.4×

 US $10–25 m 7.5×

 US $25–50 m 7.9×

 > US $50 m 8.3×

2b. Main-Street tiers – brokered deals (see bar chart)

Deal value band Median multiple × EBITDA Median Seller’s Discretionary Earnings (SDE) multiple

 < US $500 k 2.5× 1.8×

 US $500 k–1 m 3.3× –

 US $1–2 m 3.4× 3.8×

 US $2–5 m 4.3× 3.8×

 US $5–50 m 6.5× 6.0×

A bar chart visualising the EBITDA multiples for the four smallest bands appears above.

Australian reality check: knock off roughly 0.5–1.0× from each median when pricing local businesses.

3 | Buyers are bargaining harder

Sellers captured 86 % of list price on average in 2024

For deals under US $500 k, brokers reported a 100 % buyer’s market; that falls to 65 % in the US $5–50 m bracket

Take-away: airtight data and a defensible story are essential to keep discounts in check.

4 | How deals are actually financed

Deal size Senior debt Seller finance Buyer equity Note

 < US $500 k 60 % 18 % 18 % Relies on U.S. Small Business Administration (SBA - US only) loans

 US $500 k–1 m 28 % 30 % 27 % Vendor notes plug gaps

 US $5–50 m 42 % 34 % 17 % Mix of earn-outs & mezzanine

Typical pricing:

Senior debt (first-priority, amortising): 6.8 % – 9.0 % all-in rate (floating)

Mezzanine debt (subordinated, interest-only): 12 % – 18 % cash coupon plus Payment-in-Kind (PIK) or warrant kicker; target return ≈ 15 – 17 %

Definitions

Senior debt = first-lien term loan secured by business assets; lowest cost; strict covenants such as Debt-Service-Coverage Ratio (DSCR) ≥ 1.25×.

Mezzanine debt = junior, unsecured or second-lien loan; ranks behind senior but ahead of equity; priced higher and often bullet-repaid.

Because Australian banks lend less aggressively, assume more buyer equity or a larger vendor note will be needed locally.

5 | What motivates buyers

Horizontal add-on acquisitions are the top motive in U.S. deals above US $500 k

In sub-US $500 k deals, many acquirers are still “buying a job” rather than scaling a platform.

Match your pitch—synergy slides for strategics, lifestyle benefits for owner-operators.

6 | Owners remain under-prepared

Between 33 % and 67 % of U.S. owners go to market with no formal exit plan (varies by size)

. A pre-sale Quality of Earnings (QoE) review, tidy legal docs and clear tax structuring can shave months off diligence and protect value.

Three moves for 2025

Set a 12-month runway. Work back from your desired exit date, allowing for the 7-13-month average closing cycle.

Reality-check the price. Apply the U.S. multiples that match your earnings band, then subtract 0.5–1.0× for Australia.

Acronyms used

EBITDA – Earnings Before Interest, Taxes, Depreciation & Amortisation

SDE – Seller’s Discretionary Earnings

LOI – Letter of Intent

DSCR – Debt-Service-Coverage Ratio

PIK – Payment-in-Kind (non-cash) interest

QoE – Quality of Earnings report

SBA – Small Business Administration (U.S.)

ROI – Return on Investment

Understanding how global private capital is behaving—and adjusting for Australia’s environment—lets you enter the market with realistic expectations and maximal leverage at the negotiating table.