What Is My Plumbing Company Worth? Plumbing Company Valuation Multiples in 2026

Buyers value a plumbing company as a multiple of earnings, and the earnings figure they choose depends on who runs the business. If you run the trucks, bid the jobs, and hold the master license, the buyer prices your seller discretionary earnings (SDE): net profit plus one owner's full compensation plus documented add-backs. If a general manager runs the company and you could step away, the buyer prices EBITDA, which is SDE minus a market-rate salary for that manager.

SDE pricing: the owner-operator market

A company with $300,000 to $2M of SDE meets SBA-financed individual buyers, search funds and independent sponsors, and local plumbing competitors adding a service area. An individual buyer plans to replace you in the business, so they pay for the full cash flow a working owner takes home. These buyers fit a company this size because the SBA 7(a) loan caps at $5M and covers the bulk of the price.

EBITDA pricing: the platform market

Once EBITDA clears the $1M to $3M range, private equity home services platforms and franchise strategics enter: Apex Service Partners (Alpine Investors and Partners Group), Sila Services (Goldman Sachs Alternatives), Wrench Group (Leonard Green & Partners), ARS / Rescue Rooter (Charlesbank), and Authority Brands, owner of Benjamin Franklin Plumbing (Apax Partners). These buyers need a management team that stays after close, which is why they price EBITDA and not SDE. See who buys plumbing companies for how each group fits each size.

The lender's appraisal sets a ceiling on SBA deals

When an SBA-financed buyer offers more than $350,000, SOP 50 10 8.1 requires the lender to order an independent business valuation from a Qualified Source (ASA, CBA, ABV, CVA, or BCA credential), prepared for the lender. The lender cannot use an appraisal you commissioned. The SBA loan plus any seller note not on full standby cannot exceed that valuation, so any price above the appraised value must come from the buyer's cash or from debt on full standby.

A price your buyer agreed to at LOI can shrink at the appraisal stage, so the multiple you ask for has to hold up when a credentialed appraiser for the buyer's lender rebuilds your earnings from tax returns.

Plumbing companies sold for 1.66x to 3.15x SDE between 2021 and 2025, lower to upper quartile, with a median of 2.24x and an average of 2.49x, according to BizBuySell data on 226 sold plumbing businesses. Those same sold businesses had SDE of $176,702 to $545,500 (median $311,598) and revenue of $631,005 to $2,261,346 (median $1,174,514). The median sale price was $638,730.

Larger companies trade on adjusted EBITDA. In the table below, the SDE rows are BizBuySell sold-business data (2021 to 2025), and the adjusted EBITDA and multi-trade PE bundle rows are Ad Astra Equity estimates for plumbing:

Do not compare an SDE multiple to an EBITDA multiple directly. SDE still contains the owner's pay, so the same company shows a lower multiple on SDE than on EBITDA. A 2.24x SDE multiple and a 4.5x EBITDA multiple are not a gap you can close by relabeling your earnings; you close it by installing a manager and proving the business runs without you.

Run your own SDE and EBITDA through the business valuation calculator to see which band your company lands in before you take a call from a buyer.

Recurring service revenue, a bench of master plumbers, and an owner who can leave quickly raise the multiple. Owner dependence, customer concentration, and new-construction exposure lower it. These are the adjustments buyers apply against a base multiple:

The license qualifier is a diligence item, not paperwork

State plumbing contractor licenses run through a master-plumber qualifier and are generally not transferable. In an asset sale the buyer needs its own license and its own qualifier. In a stock sale the license continues only if the qualifier stays. If you are the only master plumber, the buyer either keeps you on payroll, discounts the price, or both. A customer above 40% of revenue can kill a deal outright or push a large share of the price into an earnout.

Add-backs raise SDE only when documented

Buyers accept add-backs such as an owner truck, fuel and insurance ($15K to $50K), family on payroll above market rate ($25K to $120K), and travel, meals, and club dues ($10K to $60K) when you can tie each one to a ledger entry. A deferred service-truck refresh works the other way: it is a capital cost the buyer deducts from the price. Read which add-backs a buyer will accept before you build your SDE schedule.

If you plan to sell, promote or hire a second master plumber who can serve as the license qualifier before you go to market, because a buyer will ask for the qualifier's name in the first diligence request.

A plumbing company with $400,000 of SDE is worth $664,000 to $1,260,000 at the sold-business quartile multiples, and $896,000 at the median. Take a company with $1,500,000 of revenue. The SDE build:

Apply the SDE multiples from the sold-business data to the SDE figure:

This company sits above the median sold plumbing business on both revenue and SDE, so size alone does not put it at the bottom of the range. The drivers table decides where it lands. An owner who is still on the truck and holds the only master license argues for the lower quartile. Service agreements above 30% of revenue and a foreman who can run dispatch argue for the upper quartile.

Now suppose diligence finds trucks overdue for replacement. The deferred refresh, which the add-back data puts at $50,000 to $200,000, comes off the price, not off SDE before the multiple. At the median, a $50,000 refresh takes the price from $896,000 to $846,000.

The buyer's lender will then test the deal. Under SOP 50 10 8.1, the SBA requires at least 1.25x debt service coverage on historical results, the last fiscal year or a two-year average, for Initial Acquisitions, Owner Buyouts and ESOP transactions, and 1.15x for a Business Expansion. Projections cannot be used to meet it. Add-backs that do not show up in your returns and books do not support the buyer's loan.

The EBITDA market example

A company with $6,000,000 of revenue and $1,600,000 of EBITDA after a $150,000 general manager salary carries $1,750,000 of SDE. Buyers in this size range price the $1,600,000 EBITDA, not the SDE. At the $1M to $3M EBITDA band of 4.5x to 6.5x, the implied price is $7,200,000 to $10,400,000. Ad Astra puts Wrench Group add-ons at 6x to 8x on $1.5M to $5M of EBITDA, which implies $9,600,000 to $12,800,000 on the same $1,600,000.

Applying an SDE multiple to the $1,750,000 would understate this company, and applying an EBITDA multiple to the $400,000 SDE company would overstate it, so label every multiple you see with the earnings figure it was built on.

A plumbing sale is paid mostly in cash at close, with the balance in a seller note, an earnout, or equity you roll into the buyer. Ad Astra gives these structure norms for plumbing deals:

SBA buyers and the standby note

An SBA buyer making a complete change of ownership must inject 10% of total project cost. Up to half of that can be a seller note on full standby, so 5% buyer cash plus a 5% standby note is a common structure. Full standby means no principal or interest payments for the entire term of the SBA loan, documented on SBA Form 155. Interest may accrue and is paid after the SBA loan is retired. Decide before the LOI whether you can wait that long for that slice of your price.

A seller note that is not on standby is different. It counts against the appraised-value cap on acquisition debt and its payments enter the 1.25x coverage test, which can shrink what the lender will finance.

Earnouts and rollover

An earnout ties part of the price to future results and appears when the buyer sees risk it cannot price, such as a customer above 40% of revenue. Rollover belongs to PE platform deals: you keep a minority stake in the combined company and get paid again when the platform sells.

Asset or stock

The structure also decides what happens to your license. In an asset sale the buyer brings its own license and qualifier. In a stock sale your license survives only if the qualifier stays.

Before you sign an LOI, compare offers on cash at close and on what you must earn or wait for, because a 75% cash offer and a 90% cash offer at the same headline price are different deals.