A gap between perception and reality
The divergence is particularly strong in the small-cap segment, that is, companies with under €5m in turnover. Many owner-managers build their perception from the multiples observed in the mid-market or in public indices.
Yet the transactions actually concluded in this segment settle at markedly lower levels, and this gap has widened since the rise in interest rates in 2022.
The word multiple also covers two things that need to be kept apart: the multiple applied to enterprise value, calculated before debt, and what the seller actually receives once net debt has been deducted and earn-outs taken into account. The figures in circulation almost always refer to the first.
The compression linked to the cost of capital
The main macroeconomic factor explaining the fall in multiples remains the revolution in the cost of capital. SME acquisitions rely overwhelmingly on partly bank-funded financing. When the cost of debt rises, buyers' borrowing capacity falls, and with it the price they can offer.
This contraction is even more marked in the small-cap segment, where borrowing capacity is structurally limited. Unlike mid-market companies, which can raise four to five times their EBITDA in senior and mezzanine debt, small SMEs rarely exceed leverage of two to three times.
The multiples actually observed
In Belgium, the most closely followed public source is the M&A Monitor published every year by Vlerick Business School, based on a survey of market professionals. It puts the average multiple, across all size segments, at around 6.5 times EBITDA. This figure covers a very wide range and does not describe the segment that concerns us here.
For transactions involving companies with under €5m in turnover, what we observe in our own deal flow sits rather between 3 and 4.5 times EBITDA, with a significant share of deals concluded at around 3 times, or even below in traditional sectors.
The French situation is comparable, but it is often misread because of the heavy media coverage of mid-market indices, whose levels concern transactions on a completely different scale from the fabric of small SMEs.
The first figure comes from the Vlerick Business School M&A Monitor. The other two correspond to what we observe on the files we review: they are field observations, not market statistics.
In practice, most of these transactions include adjustment mechanisms, earn-outs and deferred payments, which further reduce the value actually received by the seller.
Why small SMEs trade at a discount
The small-cap discount comes down to four elements, all linked to the risk to performance after the transfer: dependence on the owner-manager, customer concentration, weak formalisation of processes, and the absence of middle management.
Added to this is market liquidity. The number of potential buyers is smaller, which removes the scarcity premium built into the price of larger assets.
Place your company within these ranges
An estimate from your last three balance sheets, with the detail of the reasoning applied.
Value my SME →What this changes for an owner-manager
Two companies operating in the same sector can sell at radically different multiples depending on their level of dependence on the owner-manager, the stability of their revenues and their capacity to support external financing.
For an owner-manager considering a transfer, the consequence is direct: the value of an SME now rests far more on its financial track record than on its capacity to operate autonomously and to generate sustainably transferable cash flow.
That is also what makes the months of preparation preceding a sale so worthwhile: they act precisely on the discount factors, and not on negotiating power.
Key takeaways
- The multiples in the media concern the mid-market, not SMEs with under €5m in turnover.
- In the small-cap segment, the actual range sits well below, and the gap has widened since 2022.
- The discount is reduced by working on owner-manager dependence and formalisation, not by negotiating better.
Sources and references
This article combines one public source, cited by name, and our own observations. The distinction is indicated for each figure. No multiple is presented as a market average if it is not one.
- M&A Monitor, Vlerick Business School. Annual survey conducted among Belgian M&A professionals, which publishes average valuation multiples by size segment.
- France Invest. The professional association of French private equity, which publishes annual activity data on buyout capital.
- Bpifrance. Public schemes financing business transfers and takeovers, and the Lab's work on SME transfers. www.bpifrance.fr
This article is for general information purposes. It constitutes neither legal advice, nor tax advice, nor an investment recommendation. Sources last checked: September 2026.
