The recurring-revenue split
Two plumbing companies with identical revenue can be worth a full turn apart, and the reason is almost always the mix of work. A shop that lives on new-construction rough-ins is at the mercy of the housing cycle and general-contractor payment terms; a shop built on service, repair, and drain contracts has demand that shows up whether or not anyone is building. Buyers pay for the second kind. Where recurring service-agreement revenue tops roughly 30% of the book, brokers report the multiple firming toward the high end of the SDE range, and past ~60% recurring, PE buyers start quoting on EBITDA in the mid-single digits.
What buyers check first
- Master license transferability. If the license walks out the door with the seller, the sale can stall, buyers price that risk in hard.
- Commercial vs. residential split. Diversified commercial accounts add stability; a purely residential book is fine but thinner.
- Service-agreement and membership revenue. The single clearest signal of a transferable, non-owner-dependent business.
- Callback and warranty rates. A proxy for workmanship quality that shows up fast in diligence.
New-construction plumbing pays the bills; service and repair pays the multiple.
Who is buying
Below roughly $1M of SDE, the buyer is usually an individual or searcher using SBA financing on an asset sale. Above that, national service brands and franchise consolidators, the Neighborly and HomeServe families among them, and regional PE platforms compete for territory, paying 3×, 4.5× SDE (or 3.5×, 6× EBITDA) for shops that expand their footprint and come with a licensed, retained crew.
Watch the license
Confirm early whether a master license transfers, and who holds it. A deal that depends on the seller staying licensed for the new owner is a deal with a hidden earnout.
Sources
- Peak Business Valuation, Plumbing Business Valuation Multiples
- Sofer Advisors, How Much Is a Plumbing Business Worth (2026)
- ClearlyAcquired, EBITDA Multiples for HVAC, Plumbing & Electrical
- East Coast Advisory, Valuation Multiples by Industry (2026)
Plumbing valuation multiples, FAQ
On average about 2.6× SDE in 2026, with most marketplace deals between 1.7× and 3.0× SDE. BizBuySell transaction data centers the average near 2.47×. Service-heavy and commercial-diversified shops sell at the top of that band.
Yes, they are the biggest single lever. A book with 30%+ recurring service-agreement revenue firms toward the high end of the SDE range, and past roughly 60% recurring, private-equity buyers begin quoting on EBITDA at 3.5×, 6×. Recurring revenue is what turns a plumbing job into a plumbing asset.
Slightly, on average, plumbing centers near 2.6× SDE versus about 2.8× for HVAC. The gap comes from HVAC’s larger replacement tickets and stronger maintenance-plan culture. Both are non-discretionary trades that lenders and consolidators like.
Keep going
Compare every sector on the industry multiples hub, learn the buy playbook in our how to buy a plumbing business guide, price a specific deal with the valuation calculator, and see the broader market in our SMB statistics.
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