KBS - Equipment-as-a-Service - Market Insight

FACTORS DRIVING BUYER APPETITE & DEAL VALUES

In the UK EaaS sector, we have seen deal values that have been calculated on adjusted EBITDA/earnings multiples ranging from 5/6x to double-digit figures, depending on various factors such as recurring and contracted revenue, vertical specialisation, strategic positioning and scalability.

Key factors that can influence the value have included:

• Premiums for Recurring Revenue Models: Recurring contracts and subscription-based service bundles are commanding higher EBITDA multiples. Buyers that value predictability and customer stickiness are often willing to pay 1-2x EBITDA more for EaaS businesses versus traditional rentals. • Servitisation and IoT Integration Providers: Companies embedding IoT, remote monitoring or predictive maintenance into their offering are receiving technology-like valuation premiums. These value-adding services justify higher pricing by reducing downtime and driving efficiencies for clients, with EBITDA multiples ranging from 7.5x-11x. • Private Equity Roll-Ups: Private equity firms are actively consolidating regional or niche players into platform models, and these platforms trade at higher EBITDA multiples of 8x-10x. Specialisation drives pricing power, customer loyalty and entry barriers. • ESG and Sustainability Premiums: Equipment providers with energy efficiency, emissions reduction or circular economy models (e.g. asset re-usability) are beginning to attract ESG-driven capital. Sustainable EaaS providers may see early valuation premiums due to net-zero commitments, with EBITDA multiples ranging from 8x-11x.

In the UK EaaS sector, EBITDA multiples for company sales typically range from 9x to 11x.