Paper Manufacturing & Printing Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating paper product manufacturing businesses relative to industry standards.

See also: Sign Manufacturing and Packaging Manufacturing

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Highlights of Paper Manufacturers Sold on BizBuySell

Paper product manufacturing businesses listed and sold on BizBuySell are privately-owned and operated small businesses that create paper-based products for a wide variety of applications. Common businesses are large format commercial printers, custom brochure and poster manufacturers, and cardboard/paperboard product manufacturers.

Paper Manufacturing & Printing Business Transaction Trends

The median sale price of paper manufacturing and printing businesses has been on a steady growth trend since 2020. Behind these increasing prices are both improving valuation multiples across the industry, and an ever-growing number of larger paper manufacturers entering the market.

Paper Manufacturing & Printing Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of sales and income. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. Average earnings multiples of paper manufacturers sold over the past five years have trended upward, remaining strong through 2022 and 2023 as rising interest rates put pressure on the rest of the market. Paper manufacturing business valuations reached a high-water mark in 2024, at 2.8- and 0.66-times earnings and revenue, respectively.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - business valuations tend to hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall annual sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its top line sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of paper product manufacturing businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are usually higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses. When current listing multiples are lower, that signifies decreasing values or previously inflated values of sold businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Smaller businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of paper manufacturing and printing businesses are valued and sold between 1.8 and 3 times their annual seller discretionary earnings, with 25% of well-run, larger businesses trading above this range, and 25% of smaller, less desirable businesses trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings performance relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated revenue and owner earnings ranges of paper manufacturers useful for comparing an individual business to its peers sold and for sale.

Paper Manufacturing & Printing Business Revenue and Earnings Trends

Median revenue of paper manufacturing and printing businesses grew rapidly through 2022 before levelling off in 2023 and 2024, though remained well above pre-pandemic levels. 

Median discretionary earnings largely followed the same pattern, though profit margins fell in 2022 as revenue surged, indicating cost pressures likely tied to inflation. Earnings returned to 20%+ range in 2023 and 2024.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to similar businesses traded on the market. Below you will find reported owner's discretionary earnings ranges of paper manufacturing businesses sold over the past five years, as well as from recently added business for sale listings.

Revenue Ranges

Sales volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of paper manufacturers sold over the past five years and recent businesses listed for sale.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Paper manufacturing and printing businesses that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a paper manufacturer generating revenues closing on $2MM annually may sell for an earnings multiple of 3x or higher, where a smaller printing business with sales below $500k may trade closer to 2 times earnings.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable return on the purchase price.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader manufacturing sector. The chart and table below include key metrics from sales of manufacturing businesses on BizBuySell between 2020 and 2024. Note the tight correlation between median revenue and average earnings multiple.

While paper manufacturing and printing businesses tend to sell on the low end of manufacturing earnings multiples, they remain inline in terms of business size to average multiple, and those paper manufacturers that can grow revenue and maintain industry margin can command higher multiples when selling.

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