MSP Valuations

July 02, 2024

by a searcher from Ivey Business School at Western University in Toronto, ON, Canada

We're evaluating an acquisition of a prospective MSP provider. Does anyone have any insights on valuations by size, margin and growth rates of recent MSPs that have transacted?

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Reply by a professional
from University of Pennsylvania in Washington, DC, USA

I recently helped my client sell an MSP to a PE backed buyer. EBITDA of less than $1.5 mm and appx 7.8x multiple. However, my client had a banker involved and the banker created a competitive process. Before the banker got involved, the buyer made an unsolicited offer of appx 5x. Happy to discuss- redacted

Reply by a searcher
from University of Pennsylvania in Philadelphia, PA, USA

Largely depends on scale and the level / attractiveness of solutions they provide. At my prior firm, we actively looked at this and found that somewhat scaled businesses tied to attractive end-markets would trade in the high-teens EBITDA multiple range. Less familiar with very low end of the market in terms of scale.

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