What’s Your Manufacturing Business Worth? Common Multiples & What Can Shift the Sale Price

If you own a manufacturing business and have ever wondered, “What would someone actually pay for this thing?”—you’re not alone. Whether it’s curiosity, succession planning, or burnout knocking on the door, understanding how buyers value manufacturing businesses can help you make sharper decisions.

Let’s Talk Multiples

In the world of business valuation, most manufacturing businesses trade on a multiple of profit—usually EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization). It's a cleaner measure of performance that strips away financing and accounting differences.

Here’s the ballpark:

General manufacturing businesses:

EV/EBITDA multiples typically range from 3.5x to 6.0x

Implied ROI expectations: 17%–29% per year

(Buyers are doing the math on how quickly they’ll get their money back.)

Niche or high-spec industrial manufacturing (e.g., aerospace, defense supply):

4.5x to 7.5x, sometimes higher for strategic buyers

ROI drops to 13%–22%, but buyers are often after the capability, not just the cashflow.

These are median ranges—plenty of deals fall outside them. The trick is understanding what shifts the needle.

What Moves the Multiple Up or Down?

Here are the key variables that can make or break the sale price:

Customer Concentration

If one customer makes up more than 30–40% of your revenue, expect buyers to flinch. Diversified revenue is king.

Margin Profile & Cost Control

High gross margins (or the ability to hold margin despite input cost swings) suggest pricing power or efficiency—both of which attract a premium.

Key Person Dependency

If the business falls over without the owner (you), buyers will either discount it—or walk. Systemization and a competent team add real value.

Contracts & Recurring Revenue

Ongoing supply contracts, particularly with credit-worthy corporates, can push the multiple up. It reduces perceived risk.

Specialisation or IP

If your business makes a niche product, has protected processes, or offers value-add design/engineering, it might command a strategic premium.

Plant, Equipment & Scalability

A well-maintained, underutilised facility that’s ready to scale can be a big selling point. Conversely, old, overworked gear needing replacement? That’s coming off the price.

Working Capital Needs

Some manufacturers are working capital hogs. If buyers have to fund big inventory or extended debtor terms, they’ll factor that into what they offer.

Export Potential or Dependency

Businesses with offshore exposure can look sexy—or scary—depending on currency, compliance, and concentration.

Clean Books & Historical Performance

Two years of clean, growing numbers is the minimum for getting buyer attention. Messy accounts or one good year out of three? That drags the multiple down.

A Final Word of Realism

If you're in manufacturing, you’re in one of the few SME sectors where strategic buyers still actively scout. That’s a good thing. But don’t confuse interest with competition—deals still need to stack up on fundamentals. And most buyers, especially private ones, will look to buy at a price where they see a 25%–35% annual return.

Or to put it bluntly:

“The gravity in the room when talking about multiples is this—how many years is a buyer willing to work before they make a profit themselves?”