How Plumbing Companies Are Being Valued Right Now

Ask around at a supplier conference or a trade association meeting, and someone will hand you a rule of thumb for what your plumbing business is worth. 

Usually it's a multiple of revenue, passed down informally and repeated so often it starts to sound like fact. It isn't. 

Buyers don't price your top line. They price what's left after the noise gets stripped out, then apply a multiple that reflects how much risk they think they're taking on. 

Owners, like Mike, who go into a sale anchored to a revenue-based number are almost always surprised, in one direction or the other, once a real valuation gets built.

Here's what actually drives the number.

The Metric That Actually Drives Plumbing Business Valuation

Buyers value plumbing businesses on EBITDA (earnings before interest, taxes, depreciation, and amortization), not revenue. EBITDA is meant to show how much cash the business genuinely generates once financing decisions and accounting choices are set aside.

Getting there starts with net income, then adding back interest, taxes, depreciation, and amortization. From there, a good advisor goes further, adjusting for owner compensation above what a hired manager would actually cost, personal expenses that run through the business, and one-time costs that won't recur under new ownership. What's left is adjusted EBITDA, and that's the figure your valuation is actually built on.

Say an owner pays themselves $280,000 a year, but a replacement operations manager would run closer to $110,000. That $170,000 gap gets added back to EBITDA. The same logic applies to a truck that's technically a business expense but mostly sits in the driveway on weekends. None of this is unusual, and buyers expect to see it. 

The catch is that every adjustment needs to be documented. Anything that can't be backed up on paper gets discounted or thrown out entirely.

What Moves the Multiple Up

Once a buyer has adjusted EBITDA, they apply a multiple to arrive at a purchase price. That multiple isn't arbitrary. It reflects how the buyer reads the risk and the opportunity in that specific business.

1. Recurring revenue 

This tends to matter more than anything else. Service agreements and maintenance plans make revenue predictable, and predictable revenue is worth more than revenue that has to be re-earned every month through new jobs. A plumbing business with a meaningful share of income coming from active service agreements looks fundamentally different to a buyer than one running entirely on one-off calls and new installs.

2. Growth trajectory

A business that's grown steadily over the past two to three years signals that demand is real and that the operation knows how to capture it.

3. Operational independence 

It rounds it out. The less a business depends on the owner personally for scheduling, pricing, and vendor relationships, the more transferable it is, and buyers pay a premium for transferability.

What Pulls the Multiple Down

Customer concentration is one of the most common red flags in diligence. If a handful of commercial accounts make up a large share of revenue, a buyer has to ask what happens if one of them walks after the sale. That uncertainty gets priced directly into the offer.

Owner dependency is another. If technicians call the owner for pricing approval, if customers ask for the owner by name, or if key vendor relationships exist because of the owner's personal history with someone, that reads as transition risk.

Disorganized financials round out the list. Unexplained swings in revenue, undocumented add-backs, and records that take real effort to untangle all slow the process down and give buyers a reason to discount whatever they can't independently verify.

Historical Multiples and What’s Actually Happening in the Market

The plumbing industry is large and fragmented. U.S. plumbing revenue is projected to hit roughly $191 billion in 2026, growing at about 3.1% annually, according to IBISWorld data cited by Simpro's 2026 plumbing industry report. No single company holds more than about 5% of the market, and roughly 129,000 plumbing businesses operate nationwide, most of them small or mid-sized. That fragmentation is exactly what's drawing consolidators and private equity into the space.

Owner-operated plumbing businesses in the $1 million to $5 million revenue range have historically traded between 4x and 7x adjusted EBITDA, with recurring-revenue-heavy operations landing higher and project-driven businesses landing lower. Platform-scale operations with $10 million or more in adjusted EBITDA have historically commanded meaningfully higher multiples from private equity consolidators, depending on market conditions and who's buying.

In February 2026, Blackstone agreed to acquire Champions Group, an Irvine, California-based residential HVAC, plumbing, and electrical platform, from Odyssey Investment Partners for approximately $2.5 billion, about 18.5 times trailing EBITDA on an annualized base of roughly $140 million, according to Bloomberg's reporting on the deal. That's a platform-level transaction, not a typical single-location sale, and 18.5x is closer to a high-water mark than a norm. 

But it signals real institutional conviction in home services, and it's part of why more plumbing owners are fielding acquisition interest than they were a few years ago. The multiple attached to any individual business still comes down to market conditions, buyer appetite, and deal-specific factors, which is why it's worth getting a current, business-specific read rather than anchoring to an old rule of thumb.

What Mike Learned About His Own Number

The gap between a rough estimate and an actual valuation usually comes down to documentation. Above-market owner salary, personal expenses running through the business, and one-time costs that won't recur. These are all legitimate add-backs, but only when they're backed up on paper.

Mike found this out firsthand. When he finally worked through his adjusted EBITDA with an advisor, the number came out higher than the rough figure he'd been carrying around for years. He hadn't been accounting for his above-market salary or a handful of personal expenses quietly running through the business. 

Once those were documented and added back properly, the picture looked different, and it supported a stronger multiple than he'd expected going in. The final number wasn't a guess anymore. It was something he understood and could defend in front of a buyer.

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If you're thinking about selling your plumbing business, or just starting to wonder what it might be worth, NorthBase is the advisor built for this. We work exclusively with home service business owners, and we bring 20 years of experience, the relationships, and the process to maximize your outcome. Connect with Jason Hoff directly at Jason.hoff@northbase.com .

There's no pressure and no obligation. Just an honest conversation about what your business is worth and what comes next.

Sources: Bloomberg reporting on the Blackstone acquisition of Champions Group (February 2026); Simpro, "Plumbing Industry Statistics for 2026," citing IBISWorld data.