A Carolinas machining company is valued on a multiple of adjusted EBITDA, not revenue. At $5M to $20M of enterprise value, the multiple is set by customer concentration, quality registration, equipment age, and whether the business runs without the owner.
More detail
Adjusted EBITDA starts with reported profit and adds back items a new owner would not incur: an above-market or below-market owner salary, personal expenses run through the company, non-working family payroll, one-time costs, and rent paid to the owner's own property company at other than market rate. Every add-back has to be documented to survive a quality-of-earnings review. The multiple applied to that number moves with risk: a shop with a top customer under 20 percent of revenue, ISO or AS9100 registration, a plant manager in place, and a modern machine fleet sits at the top of the range for its size, while a shop with one dominant customer and an owner who does all the quoting sits well below it. Enterprise value also assumes a normal level of working capital is delivered at closing, which is negotiated separately and frequently changes the final wire. Expect the earnings to be tested before anyone funds the deal. Private equity buyers commission a quality-of-earnings review as a matter of course, and from October 1, 2026 an SBA lender financing an outside buyer at a business price of $3 million or more must order its own, reconciling your statements to IRS transcript data and rebuilding cash from bank records for the trailing twelve months and two fiscal years. Where one account is a large share of sales, the customer concentration FAQ explains how buyers price it. For a first rough range, the valuation calculator applies a sector multiple band to your adjusted EBITDA, and the CNC machining sector page covers what shop buyers read before the financials.