Channel M&A Involves More Than MSPs: Five of the New Year’s first 25 M&A deals involve MSPs — … What M&A means for MSP valuations, private equity, cybersecurity, and partners that support Microsoft, Salesforce & SAP.
Many of the buyouts involve MSPs (managed IT services providers), IT consulting firms, ISVs and private equity firms.But what trends can we glean from the first 25 technology M&A deals of 2020? But ChannelE2E cautions managed IT service provider (MSP) buyers, sellers and financiers: Those lofty valuations are extremely rare deals, typically involving larger MSPs with strong annual recurring revenue growth and healthy profit margins. But let’s not forget, 20 of the first 25 M&A deals of the year did not involve MSPs.More M&A deals and private equity investments are a safe bet. ), according to ChannelE2e interviews with key M&A sources.To estimate your potential valuation, check out the Guiding VARs, MSPs, CSPs, Total Service Providers (TSPs) s & Strategic IT Service Providers: From Entrepreneur to Exit
Indeed, private equity investors are sitting on a record Still, our sources provide plenty of valuation clues.In some rare instances, we’ve seen some MSP valuations reach 8X to 10X annual EBITDA. First,Now, the 10 early trends for technology M&A in 2020…No doubt, MSPs remain hot M&A targets mainly because (A) the market is so fragmented, (B) private equity firms crave recurring revenues and (C) money remains cheap to borrow and apply to buyouts. The first 25 technology mergers & acquisitions of 2020 revealed. Or in some cases, a The more reasonable valuation ChannelE2E has heard is 6.5X annual EBITDA — with many deals ranging from 4X (yes, that low) to 8X annual EBITDA, based on a range of factors (cash up front vs. earnout, percentage of revenues from monthly recurring services, etc. All contents © 2020 ChannelE2E and After Nines Inc. We’re only about one week into the New Year, and ChannelE2E has already tracked more than 25 technology merger and acquisition (M&A) deals.