Lower Middle Market Buyouts Cost 6x EBITDA and Have Out-Returned Larger Ones
GF Data puts the smallest platforms near 6x and mid-sized ones near 10x. PitchBook's deal-level data shows the cheap end has returned more. Both numbers carry limits.
NEW YORK, October 6, 2026. The price of a private equity buyout climbs steeply with size. GF Data tracked the first nine months of 2025. Platforms with $10 million to $25 million of enterprise value averaged 5.9x EBITDA. From $25 million to $50 million, the average was 6.6x. From $50 million to $100 million, it was 8.7x. From $100 million to $250 million, it was 10.0x.
GF Data says platforms above $100 million traded at 9.8x, against 7.0x below it. That 2.8x spread is wider than the long-run average of 2.6x.
The cheap end has paid
PitchBook’s Q1 2026 US PE Middle Market Report is the first to use SPI by StepStone deal-level data. Since 2009, realized or partially realized lower-middle-market deals returned a pooled 39% gross IRR and 3.3x TVPI. The largest cohort returned 28% and 2.7x.
PitchBook’s Steven Buibish wrote that risk does not explain the gap. The smaller deals had nearly the same number of poor outcomes. They had fewer outright losses than the upper middle market.
Where growth meets price
This is where the numbers meet Bain’s “12 is the new 5” rule. Bain says today’s deals need 10% to 12% annual EBITDA growth. Borrowing costs are higher and multiples no longer expand. Lower-middle-market sponsors have one lever left. A company that grows into the next size tier gets repriced.
Here is our arithmetic. A company with $6 million of EBITDA bought at 6.6x costs $39.6 million. Growing 12% a year for five years takes EBITDA to about $10.6 million. Sold at the same 6.6x, it is worth about $69.8 million. That is 1.8 times the purchase price.
GF Data averages 8.7x for the $50 million to $100 million tier. Sold there, the company is worth about $92 million. That is 2.3 times. The example is unlevered and ignores fees. It also assumes a buyer pays the tier average.
What could break it
The 39% is a gross figure. It covers only deals that have been realized or partly realized. Companies still sitting unsold are not in it.
Smaller platforms also borrow less. GF Data’s contributors say lenders apply stricter standards to them. Across all platform deals, debt averaged 3.2x EBITDA through nine months of 2025. It was 3.3x in 2024.
Exit is the harder risk. Apollo wrote in May that smaller assets can become more dependent on a thinner financial-buyer channel. GF Data adds that the premium for above-average performance fell to 2%, the lowest in its records. Buyers are paying for size more than quality.
One more limit on our own numbers. GF Data’s full-year 2025 report showed 297 completed deals, down 23%, at an average 7.2x. Its size-tier breakdown for the full year is subscriber-only, so the tiers above cover nine months.
What to watch
Watch whether GF Data’s full-year tiers confirm the 2.8x spread. Watch whether PitchBook’s lower-middle-market returns hold as the 2019 to 2021 vintages realize.