Distressed EBITDA multiple estimator

Sell Ltd's synthesis of ~180 UK administration sales completed 2023–2025 shows distressed EBITDA multiples cluster 0.5×–2.5× versus solvent SME multiples of 3×–8× in the same sectors. SaaS holds up best at 2.2× distressed. Retail collapses hardest to 0.8×. Source: Sell Ltd deal register + The Gazette insolvency notices.

Recurring revenue survives administration — customer contracts and IP transfer with the assets. Retail loses foot traffic, brand equity and landlord goodwill overnight; leases often break under LTA 1954 forfeiture. The 3× gap (2.2× SaaS vs 0.8× retail) reflects how much revenue actually shows up in month two after completion.

Trailing 12 months, then adjust. Administrators (Interpath, FRP Advisory, Begbies Traynor) will show you TTM numbers pulled from Companies House filings and management accounts. Normalise for one-offs, above-market director pay and arrears interest. Never trust management-forecast EBITDA in a distressed process — it's the reason the company failed.

Asset-heavy businesses (manufacturing, logistics) get a lower EBITDA multiple but a strong asset-value floor. Asset-light businesses (SaaS, professional services) get a higher multiple but nothing to fall back on. Chris rules of thumb: if plant resale exceeds 3× EBITDA, use the asset-floor calculator; if IP dominates, use the multiple.

Rarely — but yes, in strategic pre-packs where a competitor pays a premium to remove capacity or secure IP before a public sale. Sell Ltd has seen 3 such deals in 24 months where the winning bid exceeded pre-distress trading valuation. Usually the acquirer holds patents or contract rights that only work with the target.

A 5-day pre-pack clears at ~40% discount to a 4-week marketed process. Sch B1 IA 1986 gives the administrator wide discretion but SIP 16 requires justification to creditors — a competitive marketing period lifts the multiple even in distress. The urgency delta is why marketed sales average 30–50% more than pre-packs in the same sector.

Materially. One serious bidder — bottom of range. Two — mid range. Three or more — top of range or slightly above. The Insolvency Service's Statement of Insolvency Practice 16 encourages the administrator to seek competing offers where time permits.

Quarterly refresh. The multiples shown are calibrated as of Q1 2026 from Companies House sold-asset filings, The Gazette Part 3 notices and Sell Ltd's own confidential deal register. Sectors move 10–25% between refreshes — always check the 'Last updated' pill.

Enterprise value ÷ normalised trailing EBITDA. Enterprise value = cash consideration + assumed debt + deferred consideration + earn-out (at 60% probability weighting). Exclude working capital handed back to the office-holder. Include TUPE liability transferring under reg 4 — that IS part of what you're paying.

60–70% of the sector's distressed multiple as your written first offer, leaving 15–20% headroom for a counter and 10% for exclusivity. Chris only advises opening at full distressed multiple when the administrator has been public for 3+ weeks with no bids — desperation compresses to asset floor fast.

The insolvency regime differs (Bankruptcy (Scotland) Act 2016; Court of Session administrations), but market multiples do not. Buyers see the same 0.5×–2.5× band. Practical difference: process runs slightly faster because sequestration is simpler and land registration (Registers of Scotland) is quicker than HM Land Registry.

Pull the target's Companies House filings for the last 3 years. Compute trailing EBITDA. Apply the sector distressed multiple. Compare to whatever the administrator quoted. If the quote exceeds 2× your estimate, insist on a marketed process — SIP 16 backs you.