Midmarket EBITDA Multiples in 2025–26: What the Valuation Data Actually Shows

Valuation conversations are the most consequential — and most uncomfortable — part of the advisory mandate. Sellers arrive with expectations shaped by headlines, neighbouring transactions, and their own emotional attachment to what they've built. Advisors arrive with market data. The quality of that data, and how confidently it can be deployed, determines whether a process launches on realistic terms or produces a painful gap between expectation and outcome.

The 2025 midmarket data provides a usable baseline. According to Capstone Partners' capital markets analysis, PE sponsors paid an average of 12.0x EV/EBITDA through the third quarter of 2025. Private strategic buyers paid 9.8x; public strategics paid 8.6x. The average across all deal types sat at approximately 7.2x when normalised for company quality and size tier. These numbers have a story inside them that matters for how boutique advisors construct and position a buyer process.

The financial buyer premium — and when it applies

The gap between PE sponsor multiples (12.0x) and strategic buyer multiples (9.8x and 8.6x for private and public respectively) reflects a structural dynamic that has been building for several years: PE funds with capital deployment pressure are outbidding strategic buyers on EBITDA multiples to win assets. They can do this because they underwrite financial leverage, management incentive packages, and platform acquisition potential in ways that industrial buyers do not.

But the 12.0x average masks significant dispersion. PE sponsors are paying premium multiples for high-quality businesses — those with recurring revenue, strong management teams, sector tailwinds, and clean financials. The businesses that are actually clearing 12x are not the median midmarket company; they're the top quartile. For boutique advisors positioning assets, this distinction is critical. Overselling the valuation case to a seller based on headline averages, when the asset doesn't possess the quality characteristics that command those averages, creates a process that is set up to disappoint.

What buyers are actually paying for in 2026

The research is clear on what drives premium multiples in the current environment: predictable, recurring revenue; strong margins with a credible path to improvement; a management team that will remain post-close; and a clear market position that isn't purely dependent on the founding owner's relationships. Companies that score well on these dimensions get seen by more buyers, attract more competitive tension, and close at higher multiples.

The corollary is equally important: businesses that lack these characteristics — owner-dependent revenue, cyclical earnings, weak documentation, key-person dependency — will not achieve headline multiples regardless of how well the process is run. An advisor's job in those cases is to be honest about the value-creation work the business needs to do before a process launch, not to run a process on an unrealistic timeline and produce a failed outcome.

The best thing a boutique advisor can do for a seller is tell them the truth about value — including what it would take to maximise it before going to market.

The seller's market question

With PE dry powder still substantial and deal activity rebounding, sellers in the top quartile of the midmarket are in a favourable position. Buyers are competing, timelines are compressing for quality assets, and the availability of private credit financing is supporting deal structures that might have been difficult in 2022–23. The challenge for boutique advisors is accurately categorising where a given asset sits — and being honest about that assessment rather than winning a mandate on inflated expectations.

Source: Capital Markets Update Q4 2025 — Capstone Partners.