Private Equity Firms Buying Companies With Under $2M of EBITDA

Companies with less than about $2 million of EBITDA have more buyers than many owners expect. Some are private equity platforms looking for add-ons, which can pay well for a business that fills a gap in their footprint. Others are smaller private equity funds, independent sponsors, family offices and search funds, which are individuals backed by investors who want to buy one company and run it themselves.

At this size, the owner is often deeply involved in sales, operations or key relationships, and buyers know it. They will spend time understanding what happens when you step back: who takes over customer relationships, who manages the team, and how much of the business depends on you personally. A capable second-in-command, documented processes and clean monthly financials usually do more for the price than a year of extra growth.

Deals at this size often include some form of seller financing or an earnout, and buyers using bank or SBA financing will have lender requirements of their own. Owners should expect a transition period, commonly six to twenty-four months, and should be clear early about how long they want to stay.

Many of the firms below do add-ons at this size even when their headline criteria are larger. The question to ask is whether the firm already owns a platform in your sector and region. If it does, a smaller company can be very attractive.

It helps to know your numbers the way a buyer will see them. At this size buyers often start from seller's discretionary earnings, which adds the owner's own salary and benefits back to profit, and then subtract the cost of a manager to replace the owner. Owners who have prepared this calculation themselves, with documents behind each adjustment, tend to have smoother conversations and fewer surprises late in the process.

Greymont is paid by buyers, never by owners. We can help you see which buyers fit a business of your size and what they will look at first.