[Yorkie]

The type of business really influences the selling price. The M&A stuff I have done has typically been for companies with brand equity and hard assets. Multiples of EBIT is typically what we look at and if the company is a service company then you have to ask what is he actually buying? Is he buying contracts with revenue streams? Is the business where each transaction has to be acquired like construction? If the employees leave is he screwed?

From the top of my head some of the deals I have been involved with have had multiples of 8-10 for companies with brand recognition and assets to 3-5 in the service sector with good will and long term supply contracts. The multiple your friend is being asked to pay seems high but the only really good way to tell is from similar recent deals of like companies.