Issue 003 — SBA-range SMB Market, Week of April 27

Preheader: 23 listings reviewed. Sample median 4.25x (n=16). Four listings withheld asking price entirely. Margin implausibility now consistent enough to flag as a category.

Twenty-three listings in the $1M–$5M cash flow range were reviewed from BizBuySell for the week of April 27–May 3, 2026. Three were excluded as repeats from prior issues (one previously listed in Issue 001, two in Issue 002). Four additional listings did not disclose asking price and could not be included in multiple calculations. The remaining sample of 16 listings produced a median asking multiple of 4.25x, with a range from 1.79x to 9.50x.

The week-over-week directional move was upward, with the sample median rebounding from Issue 002's 3.93x to 4.25x, partially recovering toward Issue 001's 4.64x. As noted in prior issues, single-week movements at this stage reflect sample composition more than market direction. Rolling 90-day medians targeted for Issue 010 onwards will provide more reliable directional signal.

This issue's most distinctive sample feature is the high rate of asking-price non-disclosure. Four of 23 reviewed listings (17%) did not disclose an asking price, compared to zero in Issue 001 and zero in Issue 002. That pattern itself is discussed below.

Three of the four real-estate-inclusive listings landed in the upper half of their respective categories (Cabinet 9.06x in Manufacturing, Valero 9.50x in Retail, Tire/Auto 5.44x in Home services). A fourth RE-inclusive listing (Charter Bus, 4.0x) ran near the sample median because the broker disclosed minimal information about either the operating business or the property allocation.

Manufacturing again displayed the widest intra-category range, with the Custom Cabinet listing's RE-inclusive 9.06x sitting alongside the Powder Coating listing's RE-excluded 3.95x. As with Issue 001 and Issue 002, the operating multiple net of property allocation in the Cabinet listing is closer to 5.26x ($6.5M business value disclosed by broker / $1.24M EBITDA), more in line with category norms. The pattern of brokers including operating real estate in headline asking price without separating the components has now appeared in four of three weekly samples.

Ranked by asking multiple, ascending. Sample median 4.25x. Top five discussed.

Asking $6.2M on $3.45M SDE. Implied multiple 1.79x, 58% below the sample median. The lowest operating-business multiple in the sample.

The listing describes a vertically integrated solar installation platform with multi-state coverage, recurring residential customers, and complementary commercial and insurance-related revenue streams. Stated SDE of $3.45M on $10.9M revenue implies a 32% SDE margin, which is at the upper end of normal for solar installation but not implausible given the asset-light subcontractor model the listing describes.

Diligence priority: revenue durability and tax credit dependency. Solar installation businesses experienced significant tailwinds from federal residential and commercial tax credits during 2022-2024. Many state-level incentive programs have either expired or are scheduled to step down. A buyer should request a five-year revenue breakdown by customer type (residential vs commercial vs insurance-related), with explicit identification of revenue derived from contracts incentivized by tax credits scheduled to expire. The 1.79x multiple is consistent with a market that is implicitly skeptical about whether the current revenue run-rate is sustainable into 2027 and beyond. If the diligence answers that question favorably, this is a meaningfully cheap deal. If unfavorably, the multiple is appropriate.

Asking $6.5M on $2.83M SDE. Implied multiple 2.30x, 46% below the sample median.

A five-year-old tech-enabled immigration services platform with 320 active engagements, sub-3% reported churn, and an average client lifetime value of approximately $13,000. Reported SDE of $2.83M on $3.28M revenue implies an 86% SDE margin.

Diligence priority: margin reconciliation. An 86% SDE margin on a services business with reported "20+ contractors" and "weekly onboarding sessions, one-on-one strategy calls, and ongoing support" is not consistent with the operating model described. Either the contractor cost is materially understated (paid through 1099 with classification ambiguity), the owner is taking minimal compensation that will need to be replaced post-close, or the margin reflects a single peak year rather than a sustainable operating result. The SBA pre-qualification noted in the listing means a lender has reviewed the financials, but SBA pre-qualification is itself only a preliminary screen. A buyer should request the lender's underwriting memo, three-year P&L with full add-back schedule, contractor 1099 documentation, and the founder's current compensation history. The implausibility of the headline margin is explicitly the source of the discount; a buyer who can normalize the margin to a defensible 30-40% range may find the discount justifies the work.

Asking $5.0M on $1.3M SDE. Implied multiple 3.85x, 9% below the sample median.

Long Island neighborhood supermarket with $120K weekly sales (~$6.24M annual), 26 employees, and a 38-year remaining lease. Reported SDE of $1.3M on $6.24M revenue implies a 21% SDE margin, which is well above industry norms for independent supermarkets (typically 2-5% net margin, with SDE usually capped near 8-10% before normalization).

Diligence priority: SDE margin normalization for industry context. Independent supermarkets operate on thin margins; a 21% SDE figure typically reflects either substantial owner-operator labor not yet replaced in the calculation, family member wages absorbed at below-market rates, or rent that is materially below market value (the disclosed $7,800/month rent on a Long Island supermarket location should be verified against current commercial rates). The 38-year lease term is favorable but only at the disclosed rent; a buyer should verify whether the lease has scheduled escalations and whether the current rent reflects a long-tenured grandfathered rate that would not be available under any new lease. A normalized SDE in the $700K–$900K range would imply an effective multiple closer to 5.5-7x, consistent with category norms but materially different from the headline 3.85x.

Asking $18.5M on $4.71M SDE. Implied multiple 3.93x, 7% below the sample median.

Eleven-year operating history, 25-employee commercial electrical contractor in the Phoenix metro. Forty to fifty active commercial projects across industrial, ground-up construction, tilt-up developments, and tenant improvements. Reported SDE of $4.71M on $13M revenue implies a 36% SDE margin, which is high for electrical contracting (industry norm 12-20% SDE).

Diligence priority: project margin reconciliation and customer concentration. Commercial electrical contractors achieving 36% SDE typically have one of three structural advantages: (a) prevailing-wage public works contracts that pay materially above private-market rates, (b) specialty work in regulated industries (pharmaceutical, semiconductor, data center) where pricing power is structural, or (c) owner-installer compensation absorbed in the SDE figure. The listing mentions "industrial, medical, institutional" customers, any of which could justify above-norm margins. Specific customer mix by revenue, average project margin trend, and the percentage of revenue from prevailing-wage contracts should be the first diligence requests.

Asking $10.95M on $2.77M SDE. Implied multiple 3.95x, 7% below the sample median.

Founded 2016. Manufactures curing ovens and spray booths. Customer roster includes SpaceX, Lockheed Martin, Caterpillar, and Western Digital, with a first NASA order disclosed in March 2026. Revenue grew from $860K in 2021 to $4.87M TTM. Reported SDE of $2.77M on $4.87M revenue implies a 57% SDE margin.

Diligence priority: cost of goods reconciliation. A 57% SDE margin on a domestic manufacturer of physical capital equipment is not achievable under standard accounting unless one of the following conditions is true: outsourced sub-assembly carrying margin already in supplier prices (and being captured at the assembly-and-resale level), substantial unrecorded labor (founder and family members), or capitalized expenses being treated as one-time. The blue-chip customer roster is genuine sales validation, but customer logos do not normalize SDE margin. A six-person production team manufacturing $4.87M in revenue is approximately $812K revenue per production employee, which is high for physical assembly even with high-margin components. Add-back schedule, COGS detail, and labor reconciliation are essential.

Valero Gas Station + 6 Acres, Merced County, CA. Asking $9.5M on $1.0M EBITDA. Implied multiple 9.50x, the highest in the sample. Real estate is included; brand-new construction completed in Q1 2025, 2.32 acres of land plus an adjacent 0.50-acre parcel for development, 4,380 SF building. Property is at year one of operations and EBITDA is a projection rather than a trailing figure. The 9.50x multiple is not interpretable as an operating-business multiple; this is substantially a real estate transaction with a new operating business attached, complicated by the fact that operating performance has not yet been demonstrated over a full cycle.

Custom Cabinet Manufacturer w/Real Estate, United States. Asking $11.2M on $1.24M EBITDA. Implied blended multiple 9.06x. The broker discloses the allocation directly: business value $6.5M, real estate value $4.7M. The implied operating multiple is 5.26x, which is at the upper boundary of normal for cabinet manufacturing in this size range. The headline 9.06x is again a blended figure rather than an operating multiple. This is the same pattern flagged in Issue 001 and Issue 002 RE-inclusive listings; the broker disclosure of explicit allocation in this listing is unusual and helpful.

Multi-Location Tire & Auto Repair Franchise, Westchester County, NY. Asking $10.5M on $1.93M SDE. Implied multiple 5.44x, 28% above sample median. Two of three locations include owned real estate. Tire and auto repair franchises typically transact at 3.5-4.5x SDE in this size range; the headline 5.44x reflects the partial RE inclusion. Broker did not disclose property valuation, so the operating multiple cannot be cleanly isolated. A buyer should request appraisals on the two owned locations to compute the implied operating multiple.

Network Infrastructure Company, Miami-Dade County, FL. Asking $20.0M on $3.46M SDE. Implied multiple 5.79x, 36% above sample median. The listing copy is heavily marketing-oriented ("premier," "exceptional," "rapidly expanding") with limited disclosure of customer concentration, contract structure, or geographic concentration. Reported SDE of $3.46M on $7.66M revenue implies a 45% SDE margin, which is high for network infrastructure services. The combination of premium pricing (5.79x), high reported margin (45%), and marketing-heavy disclosure language is a pattern worth flagging.

Four of 23 listings reviewed this week (17%) did not disclose an asking price. This rate is materially higher than Issues 001-002 combined (zero of 49 reviewed listings, 0%). The four listings:

When asking price is withheld, the listing is typically positioned for direct broker conversation rather than open-market discovery. Three readings of the pattern are possible. First, the seller may believe the business commands a premium that retail-market buyers will not accept at headline, and prefers to filter for institutional or strategic buyers willing to engage on price discovery. Second, the broker may be running a process where multiple buyers are expected to bid simultaneously, with asking price intentionally absent to allow the auction dynamic to set the level. Third, the seller may not yet have committed to a price and is using the listing to gauge market interest before formalizing.

For a buyer evaluating these listings, asking-price non-disclosure changes the diligence sequence. Ordinarily, a buyer evaluates the listing's asking multiple against category norms before deciding whether to pursue. With asking price withheld, the buyer must form an internal valuation first and then decide whether to engage. This filters for buyers who already have a category thesis. It also self-selects for buyers who can absorb the time cost of broker conversation without immediate price feedback.

This publication will continue to track the asking-price non-disclosure rate as a sample feature. A persistent elevated rate would suggest either a shift in broker behavior or a self-selection effect in the listings being marketed publicly versus those moved through private channels.

Manufacturing multiples have now produced three weeks of data with substantial variance: 7.67x (Issue 001, n=2), 3.88x (Issue 002, n=3), 6.51x (Issue 003, n=2). The Issue 001 and Issue 003 medians both include RE-inclusive listings; the operating multiples net of RE are closer to 5x-6x, more consistent with category norms. RE-inclusive listings appear to be a structural feature of manufacturing listings in particular, possibly because manufacturing operations are typically tied to specific facilities with specialized buildouts.

Real-estate-inclusive listings appeared in four of this week's 16 valid sample listings (25%), up from three of 23 in Issue 002 (13%) and three of 23 in Issue 001 (13%). The higher rate this week may reflect sample composition; it is not yet clear whether this represents a trend. A separate reporting column for RE-included deals, flagged for Issue 004 introduction in Issue 002, will be implemented in Issue 004 next week given the persistent pattern.

Margin implausibility appeared in two listings this week (Immigration Services 86%, Powder Coating 57%), down from three in Issue 002 but consistent enough across issues to warrant the methodology note flagged for Issue 003 introduction. That methodology note is included below.

Construction category, introduced in Issue 002, produced its second week of data (n=2). Issue 002 median 5.34x and Issue 003 median 4.05x suggest a category running at or slightly above the sample median; a third week of data will help determine whether this is structural or composition.

A new category appeared in this week's sample: specialty marine construction (Issue 003 #17, Charleston SC). Marine construction with owned heavy equipment, USACE/OCRM permitting relationships, and bonded large-project execution is a distinct sub-category from general construction with materially different competitive dynamics. As sample accumulates, Construction will likely require sub-category segmentation similar to what is planned for Healthcare.

This publication flags a listing for "margin implausibility" when reported SDE on disclosed revenue produces a margin substantially above category norms for the revenue scale. Across Issues 002 and 003, six listings have been flagged: Steel Detailing 78%, Industrial Manufacturing VA 63%, Excavation UT 61%, SF Restoration 59%, Immigration Services 86%, Powder Coating 57%.

Margin implausibility does not mean the reported figures are incorrect. It means the figures cannot be interpreted at face value without normalization. Common explanations include: owner-operator labor not yet replaced in SDE calculation (most common), aggressive add-backs that will not survive lender review, capitalized expenses treated as one-time, contractor or 1099 labor classification that will not survive employment reclassification, or single-year peak performance not yet normalized.

Listings flagged for margin implausibility are retained in the sample for transparency and category coverage, but their headline multiples should be read with the understanding that lender-capitalized SDE may differ materially from broker-stated SDE. Buyers evaluating these listings should expect their negotiated price to be a function of normalized SDE rather than asking SDE.

This methodology will continue to flag listings producing margins substantially above category norms. As sample accumulates, category-specific margin benchmarks will be reported.

SDE refers to Seller's Discretionary Earnings. Most listings in this cash flow range are priced against SDE rather than EBITDA. The broker's stated metric is used. Where a broker discloses EBITDA but not SDE (three listings this week), EBITDA is substituted for the multiple calculation.

Sample median is computed from the set of listings reviewed for the week with disclosed financials and disclosed asking price. Listings without asking price are reported separately and not included in median calculations. Categories with n=1 are reported for transparency but not used for outlier identification. Rolling 90-day medians are targeted for Issue 010 introduction.

Diligence priority denotes the first question to pursue in commercial review based on the listing as disclosed. It is not a valuation judgment.

Real estate included designates listings where the broker states the asking price includes ownership of the operating property. Where the broker discloses the property allocation explicitly (as in this week's Custom Cabinet listing), the implied operating multiple is reported alongside the blended multiple.

Margin implausibility refers to reported SDE figures that imply a margin substantially above category norms for the revenue scale. Such listings are retained in the sample for transparency but flagged in diligence commentary.

The EBITDA Report compiles public listing data. Not legal, financial, tax, or investment advice. Independent verification and professional diligence are required before any acquisition decision.

Published Tuesdays. Deal Diligence published Sundays.