Is a Managed Service Provider (MSP) at true MSP or are they really a VAR

Is a Managed Service Provider (MSP) at true MSP or are they really a Value Added Reseller (VAR)

There is a lot of Mergers and Acquisition (M&A) activity out there for MSP's, and we are frequently contacted to evaluate the MSP for rollup or acquisition. People find us by using our FREE MSP Business Evaluator, or past and current work we are participating in.

What lead me to write this is that I had an organization introduced to me as an MSP for acquisition.

This organization is generating $2.3M in total revenue, and $407K EBITDA

Its revenue is from the following 35% Installation Repair 32% Computer Equipment Sales 25% Application Hosting 7% of revenue selling maintenance

With over 60% of its revenue coming from equipment sales and installation, this organization is a VAR and NOT an MSP.

If revenues were reversed, with 60% generated by selling maintenance, they would be an MSP! As a VAR they are only worth no more than $1M and as growing MSP they could be worth as much as 3 times revenue $4M-$7M ***dependant. on MANY other factors.

Organizations for sale should be represented as what they truly are and some over-emphasize of their Investment appeal is expected.

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