PowerComps Middle Market Update for Q1-2026: Quality Over Quantity

Tampa, Florida – May 5, 2026 – Middle-market private deal multiples expanded over the trailing twelve months across the $10MM to $500MM range, according to PowerComps data. Median TEV/EBITDA multiples increased from 8.4x in 2024 to 9.2x for the trailing twelve-month period ended March 31, 2026.

This upward movement comes with two important qualifiers. First, smaller transactions experienced more modest gains. Second, overall deal volume remains subdued across all size cohorts, suggesting that pricing strength is occurring in a relatively constrained transaction environment.

Median TEV/EBITDA Multiples by Deal Size

Quality Impact: Margins vs. Multiples

Market participants often default to the refrain: “good deals are getting done.” To test this assertion, we analyzed lower middle market manufacturing transactions within the PowerComps dataset.

Within the $10MM–$50MM TEV range, median manufacturing multiples were 6.7x TEV/EBITDA, with median EBITDA margins of 18.7%. However, dispersion within the dataset reveals a clear relationship between operating quality and valuation.

• Above-median cohort: 7.2x multiple; 23.9% median margins
• Below-median cohort: 6.3x multiple; 13.5% median margins

This 10.4 percentage point margin differential underscores a consistent theme: margin quality is a primary driver of multiple expansion, even in a cautious deal environment

Deal Terms: Certainty Still Comes at a Price

“The only certainty is that nothing is certain.” — Pliny the Elder

Despite this reality, dealmakers continue to rely on earnouts as a mechanism to bridge valuation gaps and mitigate uncertainty. Their prevalence remains particularly pronounced in smaller transactions.

In the $10MM–$50MM segment:

• Average earnout: 16.5% of TEV
• Median duration: 24 months

Earnouts persist as a structural feature of today’s market—less a sign of misalignment, and more a reflection of disciplined underwriting amid uncertain forward visibility.

Industry Benchmarks

PowerComps delivers proprietary transaction benchmarks at a six-digit NAICS level, further segmented by size and statistical dispersion. This granularity enables market participants to assess valuation with precision.

LTM TEV/EBITDA Multiples by Industry and Size

Two themes emerge:

• Cyclicality dampens size effects: Construction multiples show limited sensitivity to scale in the current cycle.
• Distribution remains under pressure: Ongoing tariff uncertainty and political headwinds continue to weigh on margins—and, by extension, valuations—in distribution-heavy businesses.

About PowerComps

PowerComps is a proprietary transaction database built through contributions from private equity firms, family offices, and M&A advisors. Contributors receive complimentary access in exchange for anonymized deal submissions. PowerComps is built on over 1,450 contributed deals from 131 leading middle market firms. Learn more at powercomps.com

For participation or subscription information, contact Bob Wegbreit at bobw@tagnifi.com.

About TagniFi

TagniFi is the valuation data platform for the middle market. We help middle market and valuation professionals determine what private companies are worth. Covering over 3 billion data points, TagniFi delivers industry-leading valuation information through the web, Microsoft Excel, and APIs. Learn more at tagnifi.com