Size Tier
Also known as: EBITDA Size Tier · Multiple Tier
A size tier is the EBITDA range that determines an agency's base EBITDA multiple — six tiers run from Micro (<$250K EBITDA) to Large Regional ($10M+ EBITDA).
What is size tier?
Agency multiples scale with size, not linearly but in step-functions. The MyAgencyValue methodology uses six size tiers.
Micro: <$250K EBITDA, 3.5–5.0x. Owner-operator or producer-buyer market. Limited buyer pool.
Small: $250K–$500K, 4.5–6.5x. Tuck-ins for regional brokers, individual buyers, family-office holders.
Lower midmarket: $500K–$1M, 6.0–8.5x. Beginning of the institutional buyer pool. Some PE-backed roll-ups start engaging.
Midmarket: $1M–$3M, 8.5–11.5x. Active institutional bidding zone. PE-backed platforms compete aggressively.
Upper midmarket: $3M–$10M, 10.5–13.0x. Platform agencies, often acquired as bolt-ons by larger brokers.
Large regional: $10M+, 11.0–14.0x+. Strategic buyers, large PE platforms, occasional public company acquirers.
The step-function effect is real: an agency growing from $240K to $260K of EBITDA can see its multiple band jump from 3.5–5.0x to 4.5–6.5x — a $200K–$400K valuation increase from $20K of EBITDA growth.
Why it matters in agency valuation
Knowing your tier — and the tier above — tells you whether incremental EBITDA growth will produce step-function valuation gains. An agency just below a tier breakpoint has more upside from focused EBITDA improvement than an agency comfortably mid-tier.
Example
How MyAgencyValue uses this
Tier 2's EBITDA multiple method automatically classifies the agency into one of the six size tiers based on normalized EBITDA.
Related terms
EBITDA is earnings before interest, taxes, depreciation, and amortization — the cash-flow proxy buyers use as the denominator in agency valuation multiples.
An EBITDA multiple values an insurance agency at a fixed multiple of its normalized EBITDA, typically 4.5x to 12x depending on agency size, growth, and book quality.
Normalized EBITDA is reported EBITDA adjusted to reflect what the business would have earned at market-rate owner compensation and without one-time or owner-discretionary expenses.
A quality band is the up-or-down adjustment applied to a base multiple based on book quality factors — typically capped at ±1.5x of EBITDA multiple, distributed across 7–8 individual factors.
Last reviewed: April 24, 2026
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