Author: Andre Achtermeier

MSP Market Multiples (02/2026)

Upfront reality check:

MSP valuations are not “one multiple.” They’re typically bifurcated by size (add-on vs. platform) and then move materially based on recurring mix, retention, margin quality, and concentration.

Solganick’s Q3’25 private-company ranges put Managed Services (MSPs) at

~0.9x–1.3x EV/Revenue and
~6.5x–12.0x EV/EBITDA,

explicitly noting
add-ons ~5x–8x vs. platforms near ~11x.

Annual Revenue (USD)	Typical Buyer Category	EV/EBITDA (typical range)	EV/Revenue (typical range)
<$3M	Micro / very small add-on	~3x–5x (can be lower if owner-dependent)	~0.5x–0.9x
$3M–$5M	Small add-on	~4x–6x	~0.7x–1.0x
$5M–$10M	Add-on / “scaled small”	~5x–8x	~0.9x–1.2x
$10M–$15M	Large add-on / pre-platform	~6x–9x	~1.0x–1.3x
$15M–$30M	Platform candidate (rarer)	~7x–10x	~1.1x–1.3x
>$30M	Platform / institutional scale	~8x–12x (best assets can exceed)	~1.1x–1.3x+

Evergreen-style MSP underwriting repeatedly highlights step-changes when crossing $3M / $5M / $10M revenue.
Founders’ “valuation scorecard” flags >$15M revenue as rare and “highly differentiated,” and shows observed ranges expanding into 10x–12x+ territory for strong-metric MSPs.
CRN’s 2025 conference recap frames the same reality: small/struggling MSPs ~2x–4x, strong scalable MSPs ~8x–10x, and fundamentals can add or subtract multiple turns.

Customer Concentration

Typical valuation impact (how it shows up in deals)

Mild concentration (10–15%): usually a multiple haircut and/or more conservative diligence + tighter reps/warranties.
Material concentration (15–25%): frequently a bigger haircut or the same headline multiple but with more contingent structure (earnout, holdback/escrow, seller note tied to retention).
Severe concentration (>25%+): often a deal breaker unless there’s a clear mitigation plan (contract term, renewal history, relationship not founder-dependent).

Recurring Revenue

What buyers want now (not 2019)

Houlihan Lokey explicitly shows “investors raising the bar” from ~50%+ recurring historically to ~80%+ recurring today.
Founders’ scorecard uses <50% vs. >80% recurring as a key valuation divider, stating that 80%+ should come from managed customers rather than project/one-time.
CRN (2025) calls out “premium value” indicators including recurring revenue of ~60%+ (with low churn).
Evergreen’s published minimum screen: ≥50% recurring revenue (managed services + recurring resold product), with a strong preference for recurring managed services

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February 24, 2026

The Current M&A Market for MSPs

Hardly have we launched our sell-side service for MSPs (and other tech companies) when we started receiving a wave of inquiries from business owners who, in the past, tended to be more hesitant.
Over the last several years, MSP owners were contacted almost daily by private equity firms looking to schedule an introductory conversation about a potential sale.
During that time, we were part of that ecosystem as well, supporting several buy-side platforms with deal sourcing. As a result, we know the market and its participants extremely well. On top of that, our team at eightM includes former IT entrepreneurs who bring valuable, firsthand perspective.
The most common question right now is about current multiples: What EBITDA multiple is a buyer willing to pay to own the business?
That question isn’t easy to answer, because a credible valuation depends on many variables. That said, at the moment (and please pay attention to the publication date of this article, conditions can shift almost quarterly), MSPs are generally trading in the 6x to 8x EBITDA range.
Of course, there are also private equity firms offering 5.x multiples, but the odds of getting a deal done at that level tend to be lower. For that price to win, the seller usually needs to see a very compelling future story.
A quick piece of inside baseball: If you want to optimize your purchase price, make sure no single customer represents more than 20% of revenue, that you’ve built a strong second management layer, and that you can demonstrate at least 10% growth (20% is better) over the last three to four years. And if you’re seriously considering a sale, it’s generally a bad time to pursue aggressive tax optimization because adjustments to reported numbers are often difficult to negotiate.

M&A Sell-Side Fee Calculator →

January 28, 2026
Don’t Name the First Number: Lead with an IOI

We’ve already published many articles on different deal sourcing strategies. But sourcing the right, best-fit opportunities is only one, albeit important but part of the overall acquisition process.
Perhaps the most important part is reaching alignment on Enterprise Value (EV). Even though most sellers initially say that, while price matters, the buyer’s strategy or their employees’ security is more important, the purchase price ultimately determines whether a deal closes.
We won’t dive into valuation methods today. There’s plenty written on that. The question here is: how do you walk the fine line between naming a fixed number and keeping the conversation moving?
Whoever names the first number is usually at a disadvantage, because prices rarely get adjusted upward from there. If the seller goes first, there’s a risk the figure sits below the buyer’s expectations and leaves money on the table (admittedly rare). If the buyer goes first, they may come in well below the seller’s expectations and jeopardize the deal altogether.
Our advice in this situation is to lead with an IOI (Indication of Interest) without naming a fixed EV. The IOI should either spell out the valuation approach (for example, the multiple offered on a metric such as the average EBITDA over the past three years) or present a price range that’s broad enough to allow movement, yet tight enough to frame and anchor expectations. For example: “Based on the information available and our conversations to date, we estimate an enterprise value between $3 million and $5 million.”
This approach doesn’t close doors; it keeps them open. You can then move into LOI negotiations and fix the enterprise value, or the valuation method, at the appropriate time.

November 12, 2025
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August 18, 2023
Cybersecurity Issues in Due Diligence

Cybersecurity has become a primary concern for businesses, regardless of size or industry, in today’s digital age. When considering the acquisition of a business, thorough due diligence is essential to uncover potential risks and liabilities. Evaluating the target company’s cybersecurity practices is one of the most important aspects of due diligence. In this blog post, we will explore the importance of reviewing cybersecurity issues during the due diligence process and highlight key steps for a safe and successful acquisition.
Cyber threats and data breaches have the potential to cause business disruption, reputational damage and financial loss for companies. As a buyer, it is critical to identify and assess existing or potential cybersecurity vulnerabilities at the targeted company. By conducting comprehensive cybersecurity due diligence, you can assess the risk associated with the acquisition and determine whether the target’s cybersecurity posture is in line with your risk tolerance.
As part of the due diligence process, it is important to work closely with cybersecurity experts to identify potential risks. This includes an assessment of the target company’s IT infrastructure, data privacy policies, access controls, and any prior cybersecurity incidents. Recurring vulnerabilities or vulnerabilities that have been exploited in the past may be uncovered by reviewing the company’s cybersecurity history.
Verify that the target company is in compliance with industry-specific cybersecurity standards and regulations. Depending on the industry, this may include complying with privacy laws, healthcare regulations (e.g., HIPAA), financial industry regulations (e.g., GDPR), or other applicable cybersecurity frameworks. Non-compliance can have serious legal consequences and an impact on the value of the acquisition.
Review the cybersecurity policies and incident response plans of the target. A well-defined incident response plan will demonstrate the organization’s ability to respond quickly to a cyber threat and to minimize the potential damage. Human error remains a major cause of cybersecurity incidents, so look for evidence of regular training and awareness programs for employees.
Understand the target’s relationships with third-party vendors and service providers. Especially those that handle critical data or security-related services. Evaluate the potential risks arising from these relationships and assess the security measures these external parties have in place to protect sensitive data.
Verify the target has cyber insurance. Cyber insurance can help mitigate the financial losses that result from a cyber incident. However, it is equally important to understand the limits and exclusions of the coverage and the history of claims to date.
To sum up:
In today’s digital landscape, cybersecurity due diligence is a fundamental step in any business acquisition consideration. By being proactive in identifying and assessing potential cybersecurity risks and vulnerabilities, a buyer can make an informed decision to ensure the success of the acquisition. To ensure that a target company’s cybersecurity practices comply with industry standards and regulations, it is essential to work with cybersecurity experts and legal counsel during the due diligence process. Ultimately, thorough cybersecurity due diligence protects not only the buyer’s investment, but the acquired company’s reputation and operations.

August 1, 2023
Why every good M&A advisor needs sales skills

When we started our M&A business in 2008, we strongly believed that we could add value to our clients with the know-how we had gained from our own transactions. However, we quickly learned that we needed to build some key skills on the buy-side: Sales! Why sales of all things?
When we accept an M&A buy-side mandate, we are convinced that we can find the right companies for our client and, more importantly, open the doors to the decision-makers in these companies. This is where it becomes clear that we have an analogy to the classic cold call. Not only do we have to find the right contact person, but we also have to convince them (or their assistant) to meet with us. This process requires a lot of tact and, above all, sales experience.
Once we are successful and have the decision-maker in the room, the real supreme discipline comes. We have to sell our client to the decision maker. Yes, right! We sell our customer. Because in this day and age, we, or our customer, are not the only people interested in the company. So why should we sell to our customer? You can see it: Sales is in demand!
Once the contact is made and both sides start the M&A process, of course the other classic M&A consulting skills come into play, but sales skills are also required throughout the process.
For this reason, we regularly train our team in sales and have even created a brand for outsourced sales services that builds on decades of experience in our core business.

Visit Xeloron

July 31, 2023
CEO of a Private Equity owned company

It is a unique experience to be the CEO of a private equity-owned company. Private equity firms invest in companies with the goal of achieving significant returns within a specific timeframe. Consequently, CEOs of these companies are expected to make quick, impactful decisions that drive growth and profits.
One of the biggest challenges facing CEOs of private equity-owned companies is that they need to perform. Private equity firms are investing substantial sums in these businesses with the expectation that they will recoup their money in a relatively short time, usually 5-7 years. This performance pressure can be intense, and it often means that CEOs must be agile and flexible in their decision-making processes.
The need to focus on the bottom line is another key aspect of being a CEO of a private equity-owned company. Private equity firms are typically focused on financial performance, and they expect CEOs to prioritize profitability above all else. This means CEOs must approach decisions strategically, looking for opportunities to reduce costs, increase efficiencies and drive revenue growth.
CEOs of private equity companies must also be able to be partners with their investors. Private equity firms typically take an active role in managing the companies they invest in, providing guidance and support to drive growth and improve performance. As a result, CEOs need to be able to work closely with these investors, providing regular updates on how the company is performing and collaborating on strategic initiatives.
Finally, CEOs of companies owned by private equity investors must be able to balance the needs of all of their stakeholders. While profitability is paramount, CEOs must consider the needs of employees, customers and other stakeholders. They must ensure that the company meets its obligations and responsibilities while pursuing growth and profitability.
In summary, being the CEO of a private equity-owned company can be a challenging, but also a rewarding experience. CEOs must be able to manage performance pressures, prioritize profitability, work with investors, and balance the needs of all stakeholders. While this can be a demanding role, it is also one that offers the opportunity to drive significant growth and achieve a great deal of success.

April 10, 2023
We Are Searching For IT Service Companies

For the development and growth of an IT group of companies, we are looking for the silent heroes of the tech industry: IT service companies.

Our specialty are transactions in the small cap sector. Our processes and structures enable us to integrate and actively manage companies that are normally too small for the market.

IT SERVICES

We are looking for companies in the field of managed services, voice over IP, print management, network management, exchange server management, server maintenance and all other tasks that arise in IT at the customer site.

We solve business successions

No matter if you want to stay on board as an owner and benefit from the growth spurt we bring or if you want to leave the company after a short time. We offer all paths.

Transaction Parameter

Your company must be established in the market. Startups can do better than other investors. You must have a good customer base and generate a positive EBITDA. You do NOT develop software, but are the external IT department of your customers. You have a revenue of at least USD 1 million and at least 5 permanent employees.

If all this is true, then we should talk. We would be happy to get to know each other and exchange ideas. We are fast and make very good offers.

Let’s talk.

May 2, 2022
Integration Matters!

Do you know what causes most corporate acquisitions or corporate transactions in general to fail? It’s not the purchase prices (they are already negotiated at the time of the deal).

Nor is it the customers or the employees of the target company.
It’s the integration.

Anyone can buy!

At least that is the assumption, which is of course true in parts. Buying a company is exhausting and requires a lot of diligence. The purchase has to be financed and so most of the efforts in the M&A process on the buyer side are mostly focused on the financial implications and the payment of the transaction loans.

However, at eightM, we believe this is a capital mistake.

Signing a purchase agreement is not an art. But the real art lies in integrating the target company. Because only if the target company can seamlessly integrate into the cosmos of the buying company, future synergy effects can be exploited.

Processes! Processes! Processes!

Once a company has been purchased, often enough the management level or, in the case of small companies, the managing owner says goodbye. This must be planned for and should not be underestimated.

The processes of the target company should already be analyzed and understood in detail during the due diligence.

There should be a clear post-merger integration process for the buying company. A standard process. A process that can be run through and improved again and again. Only in this way can a good buy and build concept grow into a sustainable strategy.

PMI Manager ahead!

When you set up a Buy and Build concept, you should get a PMI Manager on board. Someone who fully understands the buyer’s processes and exactly which units and processes need to be merged. Someone who makes sure that the two company cultures grow together. Someone who creates a feel-good atmosphere at the target company and thus maintains the company’s good earnings during the integration phase.

We advise and accompany many Buy and Build concepts for many years and help you in your successful hyper growth with our know how. Talk to us. Coffee always works.

February 9, 2022
Are You Ready For Buy And Build?

Developing your own Buy & Build strategy is complex and requires a lot of resources. Most companies know Buy & Build only from large corporations or private equity firms, which use such a concept to increase the value of the managed portfolio in order to resell the finished construct with a good return.

Consequently, it takes a lot of experience to realize such a concept. Corporate transactions are one of the most capital intensive investments in the life cycle of a company. The risk is correspondingly high and requires professional advice.

How to start?

Many entrepreneurs ask themselves this question. Especially in the tech industry, early planning is worthwhile, as growing product maturity often results in rapid growth. This leads to enormous costs and lack of resources.

We have developed a Readiness Check for this early phase of consideration, which interrogates the neuralgic points of a Buy & Build concept in your company and generates recommendations for action.
You will be surprised which areas in your company are affected and we promise you that there are areas, situations and processes you have not thought of yet.

Our Readiness Check uses thoughtful questions to put the 13 most important areas of your business through their paces. Based on their answers, our experienced consultants can assess what makes their company tick and identify clear areas for action.

What happens next?

Once we have worked through the Readiness Check together, it has proven effective for us to hold a one-day workshop with you. We come to you. If Covid does not currently allow it, we will find premises where we can exchange ideas safely and at a distance.
Based on the evaluations of the Readiness Check we are able to work out the best concept for you to buy and integrate companies.

The Readiness Check offers the ideal prerequisites for a well thought-out and successful Buy & Build strategy. Feel free to contact us and arrange a meeting. We will be happy to assist you professionally and experienced in your exciting project.

January 17, 2022