Sector EV/EBITDA Multiple

The sector EV/EBITDA multiple is the enterprise value to EBITDA ratio observed in transactions and stock market valuations within a given industry sector. It constitutes the central market reference for valuing a non-listed SME using the transaction comparable multiples method, anchoring the valuation on empirically observed data rather than theoretical models.

Sector multiples vary significantly according to the economic characteristics of the sector: capital intensity, revenue recurrence, structural growth, cyclicality, market power. Indicative Franco-Swiss mid-market ranges 2024-2025: B2B software (8x to 14x), business services (5x to 9x), manufacturing (4x to 7x), specialised distribution (4x to 6x), healthcare (6x to 10x), financial advisory (6x to 9x). These ranges are drawn from the Argos Index, Capital IQ and specialised sector publications.

Applying a sector multiple requires adjustments for differences between the valued SME and comparables: a size discount (20–30% for SME vs listed ETI), a growth premium or discount, and a margin adjustment. In Franco-Swiss valuation disputes, comparable selection and multiple adjustment are the most frequently debated points between expert witnesses.

Example: a Swiss industrial SME (normalised EBITDA CHF 2.2M, growth +4% vs sector median +2%, margin 18% vs median 14%) is valued. Sector median multiple: 6.0x. Adjustments: +0.3x (above-median growth) +0.5x (above-median margin) -0.8x (SME discount vs ETI comparables). Retained multiple: 6.0x. EV = CHF 13.2M. DCF cross-check: CHF 12.8M. Satisfactory convergence.

At Hectelion, we build and document sector comparable panels in our valuation reports, justifying each adjustment with updated market data.