What Is My Metal Fabrication Shop Worth? SDE and EBITDA Multiples for 2026

A buyer values a metal fabrication shop by multiplying one earnings figure by a multiple. Which figure they use depends on the shop's size and on who is buying. Owner-run shops are priced on seller's discretionary earnings (SDE): net profit, plus one owner's full pay, plus add-backs you can document. Larger shops with managers in place are priced on EBITDA, which is SDE minus a market-rate salary for the manager who replaces you. An SDE multiple only goes on SDE. An EBITDA multiple only goes on EBITDA. If you mix them, you end up quoting a number no buyer will underwrite.

The buyers split along the same line. Take the median sold shop in BizBuySell's metal product manufacturing data: about $347,500 of SDE on $1.7M of revenue. At that size your buyers are SBA-financed individuals, search funds, and local fabricators adding capacity or customers. They price on SDE, test whether those earnings cover SBA debt, and work with an appraiser the lender orders. Once EBITDA supports an enterprise value of $10M or more, the range private equity deal data starts at, a different group shows up. PE platforms, their add-on programs, and public strategics such as Mayville Engineering and Hill & Smith price on EBITDA, backed by a quality of earnings report. The full map of who pays what is on who buys metal fabrication shops.

Underneath both methods is a third: what the equipment is worth. Press brakes, lasers, CNC machining centers, and welding cells can be appraised at liquidation value. That number does not set the price when your earnings justify a higher one. It does set the floor, and it drives the collateral analysis behind an SBA loan. If your earnings times the multiple comes out below the appraised value of your machines, the asset approach sets your price, and the SBA lender's collateral review will show it.

Small metal fabrication shops sell for 2.26x to 3.72x SDE. Those are the lower and upper quartiles for metal product manufacturing businesses sold from 2021 to 2025 in BizBuySell's valuation benchmarks. The median is 2.93x and the average is 3.19x. There is no category for fabricators alone, so this one also includes other metal product makers.

Published EBITDA multiples by size band are thin. No public source gives a lower middle market metal fabrication EBITDA multiple. What you can work with are anchor points: a broad private equity manufacturing figure, two disclosed fabrication deals, and sector averages from an investment bank's metals report.

An investment bank's October 2026 metals manufacturing report puts the 2025 to YTD 2026 average at 11.2x, up from 8.6x in 2023 to 2024. That is an average across every deal the report tracks, and it includes transactions over $100M like Accu-Fab. It describes the top of the market, not a shop with a few million of EBITDA. The same report counts 137 deals in 2025, after four straight years of falling volume blamed on tariffs, rates, and geopolitics. In YTD 2026 it counts 56 deals by private strategics, up 47.4% year over year. PE platform investments made up 23.4% of deals, and add-ons rose 40%. A smaller shop meets that demand mainly as an add-on to an existing platform. The closer price anchors for that kind of deal are the 7.7x and 7.1x rows.

The same report shows why you should check any disclosed multiple before relying on it. It covers Hill & Smith's purchase of an 80% stake in Freeberg Industrial Fabrication at a $95.0M enterprise value. The text calls it about 8.5x EV/EBITDA and dates it April 2026. The transactions table lists 17.9x and 03/11/26. A gap that wide could come from different EBITDA periods, a stake measured against the whole company, or a data entry error. The report does not say which. Before you quote a disclosed multiple to a buyer, find the original press release and confirm the stake, the enterprise value, and the EBITDA period behind it.

Six things move a fab shop's multiple: equipment and CNC condition, certifications, end markets, customer concentration, owner dependence, and how well your books are documented. Each one determines where you land between the 2.26x lower quartile and the 3.72x upper quartile, or how close an EBITDA buyer stays to its anchor.

Equipment and CNC condition

A buyer's equipment inspection looks at machine hours, controller age, maintenance logs, and any laser or press brake near the end of its useful life. Whatever the buyer finds it must replace is a capital item, and it comes off the price. It does not come off SDE or EBITDA before the multiple. That difference matters. At the median 2.93x, a dollar taken off SDE costs you 2.93 dollars of price. The same dollar taken off price costs you one. Recurring maintenance and tooling are operating costs and do belong in earnings. A one-time machine replacement does not.

Certifications

Aerospace quality certification, ISO quality management certification, and ITAR registration put a shop in a narrower and better-paid pool of buyers. The same investment bank report found that aerospace and defense focused metals manufacturers averaged 10.8x EV/EBITDA, against 9.4x for the sector, from 2019 to YTD 2026. Buyers are building platforms for that work: ATL Partners launched Precise Aerospace & Defense in October 2026 by acquiring Precise Metal Products. A buyer pays for the certified revenue, so show sales by program and customer approval status, not just the certificate.

End markets

Exposure to data centers and power infrastructure, such as enclosures, racking, and containment, appears in 2026 platform announcements. Examples are Platinum Equity's investment in Tongrun International and Revelar Capital-backed Steele Solutions' purchase of Maysteel Industries. Buyers discount revenue tied to cyclical end markets. They give credit for aftermarket and repair work, which improves margin and makes revenue more predictable.

Customer concentration

Buyers ask for revenue by customer for each year of financials you hand over. They also ask whether your largest accounts work under purchase orders or under supply agreements that survive a change of ownership. When one customer carries a large share of revenue, the buyer moves part of the price into an earnout or a seller note. That ties your payout to whether the account stays after closing.

Owner dependence

If you are the estimator, the CNC programmer, and the person your top customers call, an SDE buyer is buying your job and will price in the risk of replacing you. An EBITDA buyer subtracts a manager's salary from earnings either way. If no manager is in place to show that salary works, the buyer prices in hiring risk too. A shop that already has a shop manager or general manager running the floor moves from SDE to EBITDA pricing without surprises.

Documentation

Add-backs only count if you can back them with records. Personal expenses run through the business and one-time costs need invoices and a clear explanation. The rules buyers apply are covered in which add-backs a buyer will accept. Owner dependence and documentation are the two drivers you can still change during the 4 to 8 weeks of preparation before a shop goes to market.

A shop with $400,000 of SDE is worth $904,000 to $1,488,000 on the sold-business quartiles, and $1,172,000 at the median. Here is the math for this metal fabrication business valuation. The shop has $1,500,000 of revenue and $230,000 of net profit. Add back the owner's $120,000 of pay and $50,000 of documented add-backs, and SDE comes to $400,000.

Where this shop lands depends on the drivers above. Certified work, a spread of customers, and a lead hand who runs production support the upper quartile. An owner who quotes every job, combined with an old laser, pulls toward the lower one. After you pick the multiple, subtract whatever equipment replacement the buyer's inspection turns up, dollar for dollar.

Next, check the price against SBA rules, because your likely buyer at this size is financing with an SBA loan. Any price above $350,000 means the lender must order an independent valuation from a Qualified Source, such as an ASA, CBA, ABV, CVA, or BCA. The SBA loan plus any seller debt not on full standby cannot exceed that valuation. SOP 50 10 8.1 also requires at least 1.25x debt service coverage on historical results, using the last fiscal year or a two-year average, for an initial acquisition. Projections cannot be used to meet it. On a $1,172,000 price alone, the 10% equity injection would be $117,200. Up to half of that can be a seller note on full standby. Closing costs and working capital raise total project cost, so the real injection is higher. Fab shops are manufacturers under NAICS 31 to 33, so SBA loans of $700,000 or less carry a 0% upfront guarantee fee in FY 2027. Run the coverage test in the SBA loan calculator.

The EBITDA version: $1,600,000 of EBITDA

The second shop has $6,000,000 of revenue and $1,600,000 of EBITDA after paying a general manager $150,000, which puts SDE at $1,750,000. At this size the metal fabrication EBITDA multiple matters, and the SDE quartiles no longer apply.

The first two rows are where a shop of this size starts negotiating. The third is the number you get by applying a sector average to a company smaller than the deals that drive it. A deal this size is beyond the $5M SBA loan maximum, so a buyer will bring other capital, and the quality of earnings report becomes the document that confirms the $1,600,000. To run your own shop through the same steps, compute SDE from your tax returns, choose the quartile or anchor your diligence file supports, and subtract the equipment replacement the buyer's inspection will find.

A fab shop sale is paid in some mix of cash at closing, a seller note, an earnout, and, with private equity buyers, rolled equity. The mix follows the buyer. The headline price only means something once you know how much of it arrives at closing.

• Cash at closing. An SBA buyer funds closing with a 7(a) loan of up to $5M. The business portion amortizes over no more than 10 years, and any real estate portion can run up to 25. The buyer puts in 10% of total project cost. Up to half can be your seller note on full standby, so 5% buyer cash plus a 5% standby note is common.
• Seller note. A standby note pays you nothing, neither principal nor interest, for the full life of the SBA loan. Interest can accrue and be paid after the loan is retired. A note that does pay currently counts toward the debt cap set by the valuation and toward the 1.25x coverage test. That limits how large it can be.
• Earnout. An earnout fits a specific risk: a dominant customer, a pending aerospace qualification, or a contract that has not renewed yet. Tie it to revenue or gross profit from named accounts. Avoid tying it to net income, which the buyer controls after closing.
• Rollover. PE platforms often ask the seller to keep a minority stake. Rolled equity pays out when the platform is sold, so judge the sponsor as a future partner, not only as a buyer.

Equipment-heavy shops also need to plan the purchase price allocation. Price allocated to depreciated machinery is taxed differently from price allocated to goodwill, and the buyer will push for an allocation that helps their own taxes. Settle the allocation at the LOI stage, before the price is fixed.

Munera represents sellers with $1M to $30M of enterprise value, and nothing is listed publicly. Your shop is shown only to buyers who have signed an NDA and been vetted for capital and fit, using a blind profile until they qualify. If your shop matches one of our active buyer clients, the buyer pays our fee and you pay nothing. Otherwise we run a confidential search on a success fee paid at closing, with no monthly retainer and a $5,000 deposit credited against the fee. A signed LOI comes 3 to 6 months after you decide to sell, and closing follows 60 to 90 days after the LOI.