January 15, 2020
Find out what your MSP is worth.
As you know, the MSP market is rapidly consolidating and you're likely constantly hearing different stories about what your company may be worth.
GP Partners is a Finder – we are paid exclusively by several private equity-backed Managed IT Service Providers that are looking to grow by acquiring other quality MSPs.
We have initiated 11 acquisitions over the last three years and we wanted to share what multiples we see MSPs selling for. This is based on actual market data.
First, to be a viable acquisition target, you must generate at least 50% of sales from recurring service contracts. You also need to generate at least $250k of net profit (EBITDA).
Onto the multiples. For companies with:
· EBITDA between $250k and $1m we are seeing companies sell for 4x to 5x all cash.
· EBITDA between $1m and $2m we are seeing companies sell for 5x to 6x all cash.
· EBITDA between $2m and $5m we are seeing companies sell for 6x to 8x all cash
Larger companies with higher recurring revenue generally get the higher end of the multiple range.
If you’d like to discuss selling your MSP please reach out to our team.