Arcvue
M&A—how a GovCon business gets priced
Enterprise value is earnings times a number, and the number is the argument.
A GovCon company is valued as adjusted EBITDA multiplied by a market multiple. The earnings are largely a matter of record. The multiple is what everyone in the room is actually negotiating. Arcvue profiles the ten factors a buyer moves it on and tracks them quarter by quarter, so the negotiable half is the half you have evidence for.
Five million of adjusted earnings, at six times.
Basis a worked valuation at an illustrative multiple. Synthetic sample. The same invented company runs through the earnout and net-working-capital pages, so the three can be read together.
These are ENTERPRISE value multiples. Enterprise value includes debt, so what an owner actually receives is a different number—worked on the net working capital page.
What the multiple usually reflects.
| Band | Typical profile |
|---|---|
| 4.00 to 6.00 | Smaller firms, concentrated customer base, thinner recompete history. |
| 6.00 to 8.00 | Mid-market, solid recompete record, diversified across agencies. |
| 8.00 to 10.00 | Larger firms, strong growth, differentiated capability. |
| Over 10.00 | Premium: cleared workforce, proprietary technology, high-demand NAICS. |
Basis conventional bands. The multiple moves on growth, recompete win rate, backlog length, customer concentration, and how replaceable the workforce is.
Modeled against your own numbers rather than a rule of thumb.
M&A applies multiples to your adjusted earnings and carries the result through debt structure, earnouts, and covenant testing, so the number a banker quotes can be checked against what the business actually produces.