February 1, 2026
How Asset-Heavy Businesses are Valued: Multiples in Manufacturing
Asset-heavy manufacturing businesses are typically valued using earnings-based multiples, with SDE multiples (≈2.7x–3.5x) applied to smaller, owner-operated firms and EBITDA multiples (≈3.5x–4.5x+, higher for strong subsectors) used for larger, professionally managed companies. Physical assets like machinery and facilities help set a valuation floor and influence risk, but true value is driven by normalized cash flow, asset condition, customer concentration, and operational efficiency. In cases of uneven profitability, revenue multiples (≈0.5x–0.8x) may be used as a secondary benchmark, though they are less precise than cash-flow-based methods.
