Current market multiples (2024–2025).

Valuations for platform-ready agencies have hit record highs. The criteria for achieving premium multiples have tightened in parallel — buyers in 2026 are no longer paying for simple top-line growth. They are scrutinizing the quality of earnings, the durability of the book, and the direction of the trend underneath the surface revenue number. This Tactical names what the market is paying, what it is paying for, and where the most common mispricing happens.

§ 01 · The size bands, observedWhat 2024 data actually showed.

The average base purchase price across the agency M&A market reached approximately 11.2× EBITDA in 2024. The average is the least useful number in the dataset; the size-tier breakdown is what matters operationally.

Smaller agencies (under $2M EBITDA).

Typically clear 8–10× EBITDA when prepared. This sits inside the canonical market band. The buyer pool is regional brokers and individual buyers; deals are tuck-ins at the low end and bolt-ons at the higher end. Capital constraints in this buyer pool put a structural ceiling on the multiple — even an excellent small agency rarely clears 10× from this pool alone.

Mid-market ($2M–$5M EBITDA).

Typically clears 10–12.5× EBITDA — the competitive band. The buyer pool widens to national brokers and PE-backed platforms. The multiple in this band is more responsive to readiness: a mid-market agency with strong Pillar scores can outperform; one with weak fundamentals lands at the lower end despite size.

Platform agencies (above $5M EBITDA).

Typically clears 12–14.5× EBITDA, with kill-zone bids (15–19×) reserved for platform-thesis intersections — geographic infill, line-of-business consolidation, carrier-appointment access for institutional PE. The buyer pool here is institutional PE and strategic acquirers with mandates and capital structures aligned to platform scale.

The 4–6× spread between the lowest tier and the highest tier is the structural reality of the market. Crossing a tier breakpoint is often the highest-return move an owner can make in the runway — far exceeding the incremental revenue itself.

§ 02 · The hard-market mirageRevenue up does not mean book up.

The single most common mispricing in this cycle is the hard-market mirage — the gap between revenue growth driven by premium rate inflation and revenue growth driven by net new clients. Buyers see both numbers; sellers often see only one.

The trap.

An agency reports 15% revenue growth. The seller frames it as a growth narrative. The buyer's deal team reads the hard-market premium-rate data alongside it — and discovers carriers raised rates 20% over the same period. The agency is effectively shrinking in unit terms while the revenue line grows. Buyers treat this as low-quality, passive growth and discount it accordingly.

The defensible metric.

Policy count retention strips out rate effects. An agency showing 95% policy retention during a 20% rate-hike cycle has proven clients are loyal to the agency, not trapped by the market. That number holds value when the market softens. Revenue growth driven by rate inflation does not.

"We maintained 96% retention during a 20% rate hike cycle" defends value better than "we grew revenue 18%." The first proves loyalty; the second proves the market raised rates.

§ 03 · Business mix and the multipleCommercial versus personal versus specialty.

The composition of the book drives buyer appetite and multiple within whatever band the agency clears. Three patterns recur in 2024–2025 transactions.

Commercial lines — premium band.

Valued highest due to high switching costs and stickiness. Specialized commercial niches (construction, healthcare, trucking) command the strongest multiples because the underlying expertise is hard to replicate. The advisory-relationship model creates higher retention and pricing power that survives ownership change cleanly.

Personal lines — risk band.

Buyers are cautious — especially in coastal regions. Weather events and underwriting losses have introduced volatility, leading to lower valuations or earnout-heavy structures. A personal-lines-heavy book in a hurricane-exposed state will typically clear 0.5–1.0 turn below the equivalent commercial book on multiple alone.

Niche specialty — moat band.

The Generalist–Specialist gap shows up cleanly here. Generalist agencies clear at roughly 7.5×; niche specialists at roughly 10.8×. The 44% premium is real and consistent across the 2024 data. Specialization is operationally expensive to build and operationally valuable to sell.

§ 04 · The five operational drivers behind every numberWhat buyers are reading.

Underneath the size bands and the business-mix bands, the same five operational drivers explain why two agencies at the same size and mix can clear 2× apart on multiple. These are the same drivers from the Four Pillars — surfaced here in the language a buyer's deal team uses in the room.

Pro Forma EBITDA quality.

Owners report taxable income; buyers value Pro Forma EBITDA after add-backs. The "Lifestyle P&L" trap — running personal expenses through the business to minimize taxes — leaves real value buried. The remediation is documented in the financial-optimization Tactical; the consequence shows up directly in the multiple.

Organic versus inflationary growth.

The hard-market mirage from §02. Buyers strip out rate effects; sellers who anticipate the strip-out and reframe around policy count retain leverage.

Business mix balance.

From §03. Commercial premium versus personal risk versus specialty moat — each tier within the size band reads differently to different buyer pools.

Client and carrier diversification.

Stability is the ultimate valuation driver. Top client >15% of revenue triggers either multiple compression or a clawback provision. Single-carrier dependency triggers carrier-specific diligence and possibly an earnout tied to that carrier's appetite.

Operational maturity.

Buyers pay for businesses, not jobs. A second layer of management, documented SOPs, modern AMS with clean data — these are the markers of an agency that integrates without owner-shaped voids appearing post-close.

§ 05 · How to use this Tactical in the runwayThe sequencing.

The bands are observational. The drivers are causal. The practical operator reads this Tactical alongside three companion pieces: the Four Pillars for the framework, the 38 Critical Factors for the empirical ranking, and the Strategic Runway for the timeline.

Three pragmatic moves: (1) identify the size band you currently clear, and the next band up; (2) compute the gap between your current multiple and the median of the next band — that's the dollar value of the runway work; (3) sequence the operational drivers in the order they move the multiple inside your band, not the order they appear in any list. The hard-market mirage and the concentration metrics typically move the multiple fastest for sellers in 2024–2025.