The Low-Voltage Acquisition Play Most Search Funders Have Never Modeled

The Low-Voltage Acquisition Play Most Search Funders Have Never Modeled Most search funders evaluating technology services are modeling MSP acquisitions. There is a better entry point most have not considered. Low-voltage infrastructure companies including structured cabling, access control, CCTV, building automation, and physical security integration trade at 3 to 5 times EBITDA as project-based service businesses. Well-run IT Managed Service Providers (MSPs) with recurring revenue trade at 7 to 10 times EBITDA or higher. The acquisition thesis is clean. Buy a low-voltage company at project-business valuations. Build or import a managed services practice around the existing client base. Convert trusted project relationships to recurring managed services agreements. The valuation arbitrage between entry price and post-conversion enterprise value is material. The client profile strengthens the case further. Low-voltage companies serve commercial businesses running 50 to 500-plus employees. Client attrition on converted relationships runs lower than on cold-acquired clients. And the purchase price reflects a business category the managed services acquisition market has not yet repriced. One Florida operator executed this from the inside, building a managed services practice on top of an existing low-voltage business and growing to nearly $16M in blended revenue with managed services EBITDA running at 32.5%. I covered the full acquisition thesis in my latest edition of MSP Executive Intelligence. Happy to discuss the model with anyone evaluating technology services acquisitions. https://www.linkedin.com/pulse/stop-buying-msps-buy-low-voltage-company-instead-paul-daigle-17x6e