It's the question every business owner asks sooner or later: if I sold today, how much would I receive for my company? The short answer is that it depends on the method, the sector and how prepared the financial information is. The long answer is this guide.
Quick summary: in Colombia and Latin America, EV/EBITDA multiples typically range between 6x and 10x depending on the sector, below US averages due to the country risk premium and the smaller size of mid-market companies. A company with EBITDA of COP 5,000 million in a sector trading at 7x would have a reference enterprise value near COP 35,000 million, before adjusting for debt and cash.
01 Valuation methods used in Colombia
There's no single correct way to value a company: several methods exist, each better suited depending on the objective (selling, attracting an investor, litigation, a tax procedure) and the type of business. The three most used in the Colombian market are:
- Discounted cash flow (DCF): projects the cash the company will generate in coming years and brings it to present value using a rate that reflects the business's risk. It's the most rigorous method and the most required in formal technical reports.
- Market multiples (EV/EBITDA): compares the company to similar transactions or companies in the same sector. It's fast and anchored in what the market actually pays, but depends on finding representative comparables.
- Adjusted book value: starts from the balance sheet and adjusts assets and liabilities to their real market value. Useful for companies with significant tangible assets or in liquidation processes, but tends to underestimate businesses that are worth mainly for their future cash-generating capacity.
A serious technical valuation doesn't rely on just one: it contrasts at least two methods and explains why, if they differ, one carries more weight than the other for that specific case. Reports prepared under standards such as IVS 2025 or ASA-BV Standards require exactly that combination of methodologies.
02 EV/EBITDA multiples in Colombia and the region
The EV/EBITDA multiple relates a company's value (Enterprise Value, or what the whole business is worth regardless of how it's financed) to its EBITDA, operating earnings before interest, taxes, depreciation and amortization.
| Reference | EV/EBITDA range | Comment |
|---|---|---|
| Global median of M&A transactions | ≈ 9x | Broad average across sectors and geographies |
| Latin America, by sector | 6x – 10x | Typical range observed in the regional market |
| Gap versus the United States | −2x to −4x | Discount for country risk and smaller size |
| Mid-market and small companies | Below the range | Smaller size means lower liquidity and a lower multiple |
Two factors explain why a Colombian company rarely reaches the multiples of a comparable US company: the country risk premium (close to 6% in Colombia) and the smaller size typical of local mid-market companies, which makes them less liquid and riskier in a buyer's eyes. To go from enterprise value to the value that corresponds to shareholders (equity value), net financial debt is subtracted: Equity Value = Enterprise Value − Net debt.
03 A simple numerical example
Suppose a manufacturing company with annual EBITDA of COP 5,000 million, in a sector currently trading near 7x EV/EBITDA.
- Enterprise value: COP 5,000 M × 7 = COP 35,000 million
- If the company has COP 6,000 M of financial debt and COP 1,000 M of cash, net debt is COP 5,000 M
- Value for shareholders (equity value): COP 35,000 M − COP 5,000 M = COP 30,000 million
This calculation is an indicative reference, not a formal valuation. The actual multiple depends on the specific sector, growth, customer concentration and the quality of available financial information, all of which is covered in the following sections.
04 What factors raise or lower your company's value
At the same EBITDA, two companies in the same sector can be worth very different amounts. What makes the difference:
- Customer concentration: if a single customer accounts for more than 30-40% of sales, the buyer perceives more risk and demands a discount.
- Founder dependence: if the business doesn't run without the owner's daily presence, it's worth less than one with a consolidated management team.
- Quality of financial information: unreconciled, uncertified financial statements mixed with personal expenses generate distrust and discounts during due diligence.
- Clear legal and corporate structure: disputes over share ownership or unidentified contingencies stall any negotiation.
- Growth and margins versus the sector: a company growing above its industry sustains higher multiples than a stagnant one.
These same five variables are, not by coincidence, the starting point of ValorReady360, our business readiness diagnostic: it measures where your company stands on each of these dimensions before starting a sale process or a formal valuation.
05 Common mistakes when estimating a company's value
- Using unnormalized accounting EBITDA: without adjusting for non-recurring expenses, the owner's personal expenses or off-market salaries, EBITDA is distorted and so is the valuation.
- Comparing against different sectors or sizes: applying the multiple of a large company from another country or industry produces unrealistic results.
- Ignoring net debt: confusing enterprise value with shareholder value is one of the most frequent mistakes in informal estimates.
- Relying on a single method: a figure that comes only from multiples, without contrasting it with discounted cash flow, is fragile against any objection during a negotiation.
- Waiting until the last moment to prepare: organizing financial and legal information takes time; doing it in advance tends to translate into better sale terms.
06 When do you need a certified professional valuation?
A calculation like the one in this article is useful as a first reference. It isn't, however, when the report must hold up before a third party: a buyer, an investor, a judge or an entity such as the DIAN or SuperSociedades. In those cases you need a technical report prepared by a certified appraiser, under internationally recognized standards (IVS 2025, IFRS 13, US GAAP ASC 820 or ASA-BV Standards), that withstands objections and is defensible at the negotiating table or before a court.
In Colombia, that certification is granted by the Autorregulador Nacional de Avaluadores (ANA), under Ley 1673 de 2013. ValorActiva is certified in ANA categories 11, 12 and 13 (operating assets, intangibles and special intangibles), which allows us to issue technical opinions valid before any authority or counterparty.
Not sure whether your company is ready for that process? Before commissioning a formal valuation, take the ValorReady360 diagnostic: it measures across 6 dimensions how prepared your company is for a sale, an investment round or an M&A process, and delivers an immediate report with your readiness index.
07 Frequently asked questions
What is the average EV/EBITDA multiple in Colombia?
There's no single number: it depends on the sector, size and market timing. As a general reference, in Latin America EV/EBITDA multiples tend to fall between 6x and 10x, at a discount to the United States mainly explained by the country risk premium and the smaller relative size of mid-market companies.
How do I quickly calculate my company's value?
Multiply your normalized EBITDA by your sector's typical multiple to get the enterprise value, then subtract net financial debt to arrive at the value that would correspond to shareholders (equity value). It's an indicative estimate, not a formal valuation.
Is a quick estimate useful for negotiating the sale of my company?
It works as an initial reference, but it doesn't replace a technical valuation. To negotiate with backing, present your case to investors, or meet requirements before the DIAN, SuperSociedades or a court, you need a report under recognized standards and signed by a certified appraiser.
What's the difference between valuation by multiples and discounted cash flow (DCF)?
Multiples compare your company to similar market transactions or companies. DCF projects your own company's future cash-generating capacity and brings it to present value. It's best to use both and check that they converge.
How quickly can I get a professional valuation of my company?
At ValorActiva, a business valuation report is delivered within 10 to 20 business days, depending on the complexity of the case and the availability of financial information.
Note: this article is for informational and educational purposes. The figures and examples are market references and do not constitute a formal valuation or investment recommendation. Each company requires a specific analysis based on its actual financial information.