Why Public Contractors Trade at 15x–34x EBITDA While You'll Hear 4x–8x

The Ceiling Sets the Floor

When a PE firm sits down to value your $10M mechanical contracting business, they don't start with your QuickBooks. They start with five public companies.

Comfort Systems USA. EMCOR Group. APi Group. Limbach Holdings. IES Holdings.

These are the largest publicly traded specialty contractors in the U.S. Their market valuations set the ceiling for the entire industry — and every private contractor multiple is derived by discounting down from that ceiling.

Here's what they trade at today, based on their most recent 10-K filings:

The median public contractor trades at 19.7x EBITDA. The highest — Comfort Systems — trades at 33.9x.

Your business will likely sell for 4–8x.

That's not a criticism. It's math. And understanding the math is the first step to improving your number.

What Drives the Gap

The difference between 20x and 5x isn't just size. It's six specific factors that PE firms explicitly price:

1. Recurring Revenue Mix

APi Group generates 54% of revenue from inspection, service, and monitoring — up from 40% in 2021. Their CEO calls it a "protective moat." They trade at ~19.7x EBITDA.

A project-heavy contractor with no service agreements might get 4–5x. Revenue predictability is the single biggest multiple driver in contracting.

2. Scale and Diversification

Comfort Systems operates across 170+ locations. EMCOR has 44,000 employees across electrical, mechanical, building services, and industrial segments. If one branch has a bad quarter, it doesn't matter.

If your $10M business loses its biggest customer — the one who represents 30% of revenue — it's existential.

3. Liquidity Premium

Public company shares trade instantly. Selling a private contracting business takes 6–18 months, involves lawyers, accountants, and a buyer who may walk at the last minute. Buyers pay more for the ability to exit quickly.

4. Financial Reporting Quality

Every company on this list has audited GAAP financials, detailed segment reporting, and clean backlog data. Most private contractors run on cash-basis QuickBooks with no job costing. PE discounts for uncertainty — and they should.

5. Management Depth

Can your business run without you for 90 days? If the answer is no, the multiple drops. Public companies have deep management benches by definition. Your owner-dependence is the single biggest risk factor PE prices.

6. Customer Concentration

EMCOR spreads risk across thousands of customers and dozens of markets. If one GC represents 30% of your revenue, that's a risk PE explicitly discounts — often by 10–20% on the multiple.

The Valuation Bridge

Here's how the math actually works, from public multiples down to your exit number:

The gap between each tier is where value gets created — or destroyed.

Multiple Arbitrage: Why PE Keeps Buying

This is the mechanic driving 800+ contractor acquisitions since 2022.

PE buys your company at 5–6x EBITDA. They bolt it onto a platform with better systems and management. They exit the combined entity at 10–12x.

Your $1M in EBITDA at 5x is worth $5M standalone. Inside a platform valued at 10x, that same EBITDA is worth $10M. The value creation isn't magic — it's the gap between private contractor multiples and platform multiples.

Every dollar of your EBITDA becomes worth twice as much inside the right platform.

What You Can Actually Control

You can't become a $9B public company. But you can close the gap within your tier:

Move from 4x to 7x by:

• Building a service agreement book (recurring revenue)
• Reducing customer concentration below 15% for any single account
• Getting clean accrual-basis financials with real job costing
• Building a management team that can run without you
• Documenting your backlog with signed contracts

Move from 7x to 10x by:

• Hitting $15M+ revenue with consistent growth
• Running 50%+ service/maintenance revenue mix
• Having audit-ready financials and detailed segment reporting
• Demonstrating 3+ years of margin stability
• Operating in high-demand end markets (data centers, healthcare, semiconductor)

The Data Center Premium

Comfort Systems USA trades at the highest multiple in this group — ~34x EBITDA — driven by its outsized data center and semiconductor exposure. IES Holdings is right behind at ~20x, also riding data center and communications infrastructure demand. Every CEO in this comp set called out data center demand as a growth driver in their most recent earnings calls.

If you're an electrical or mechanical contractor doing data center work, you're in the hottest end market in contracting. That exposure alone can add 1–2x to your multiple.

The Full Picture

We track all five of these companies — their financials, operating metrics, M&A activity, and earnings themes — in the Level Market Monitor. It's updated quarterly from SEC filings.

If you want to understand what PE sees when they look at your books — and how to close the gap between where you are and where these companies trade — that's what we do.

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FAQ

Q: Why should a $10M contractor care about companies doing $9B or $17B in revenue?

Because these companies set the valuation math for the entire industry. When a PE firm evaluates your business, they start with public company multiples as the ceiling, then adjust down for size, risk, and reporting quality. Understanding the ceiling helps you understand your floor.

Q: What EBITDA multiple can a private contractor realistically expect?

It depends on size and quality. Under $5M revenue: 3–6x EBITDA. $5–15M: 5–8x. $15–50M: 6–10x. $50M+ platforms: 8–12x+. The biggest drivers are recurring revenue percentage, customer concentration, management depth, and financial reporting quality.

Q: How often do public contractor valuations change?

Daily — they're publicly traded stocks. But the underlying financials that drive those valuations update quarterly (10-Q) and annually (10-K). We update the Level Market Monitor after each earnings season.

Q: Is now a good time to sell a contracting business?

Backlogs are at record highs (Comfort Systems: $11.9B, EMCOR: $13.3B). M&A activity is accelerating at premium multiples. Strategic buyers paid 8–13x EBITDA for recent acquisitions. The market for well-run contractors is strong — but "well-run" is doing a lot of work in that sentence.