Q2 2025 Private Company Market Update: Modest Multiple Recovery, Sector Gaps Widen
- Ernest Bednarz
- 12 minutes ago
- 2 min read
Missed our Q1 2025 Private Company Market Update? Click here to read!
As Spring finally blooms and we move into the next quarter of 2025, the first revealed a slight recovery in median valuation multiples for private companies, following the Q4 2024 decline. However, a deeper dive into sector-level data shows an increasing divergence in transaction values across industries.
EBITDA Multiples Edge Upward
According to Exhibit 1A, the median EBITDA multiple for private company sales rebounded to 3.7x in Q1 2025, up from 3.2x in Q3 2024, though still well below the peak of 4.8x reached in Q2 2024. This marks a partial stabilization after the volatility seen through the latter half of 2024. The three-quarter trailing average suggests the market is correcting, not collapsing
Margins Hold Steady at 16%
Exhibit 2 shows EBITDA margins remained unchanged at 16% for the second consecutive quarter, after a modest decline from 18% in Q3 2024. Margins remain above pre-2022 levels, which generally fluctuated between 11% and 15%, indicating resilient operational performance among acquired companies.
Sector-Level Multiples Highlight Volatility
Exhibit 3 continues to highlight significant valuation gaps across industry sectors. For all time periods, Information (10.8x) and Utilities (8.2x) sectors continue to post the highest EBITDA multiples. Notably, the last 12-month median multiple for Information skyrocketed to 20.9x, reflecting heightened investor interest and potentially optimistic growth expectations and re-ocurring revenue models prevalent in the IT space. At the lower end of the spectrum, sectors such as Accommodation & Food Services (2.6x) and Other Services (3.1x) remain consistently discounted.
Year-Over-Year Median Shifts by Sector
Exhibit 10 illustrates that from 2023 to 2024, Transportation & Warehousing and Real Estate, Rental & Leasing saw the most notable year-over-year increases in median EBITDA multiples - rising from 3.3x to 4.1x and 3.2x to 4.0x, respectively. Meanwhile, the Information sector posted a surprising decline from 7.1x to 5.8x, potentially reflecting normalization after a post-pandemic tech surge.
Looking Forward in the Private Company Market
While overall EBITDA multiples show signs of modest recovery in early 2025, sector-level performance continues to vary widely. For buyers and sellers alike, sector dynamics and margin sustainability remain key valuation drivers.
Data source: DealStats Value Index (Q2 2025) - The DealStats Value Index summarizes valuation multiples and profit margins for private companies that were sold over the past several quarters. Business Valuation Resources (BVR) captures this private company transaction data in its DealStats platform.
Note: If you would like to get a copy of the full report please contact us directly or sign up for our newsletter and you will receive our market updates when they are published.
Malahat Valuation Group specializes in business valuation and real estate appraisals to owners of privately owned companies and their professional advisors.
When owners need to leverage, sell or reorganize their assets, we answer the age-old question "What is it worth?".
We provide our clients and their advisors peace of mind by preparing professional valuations that stand up to scrutiny from lenders, the Courts, and the Canada Revenue Agency.
Malahat Valuation Group Inc.
(250) 929-2929
Comments