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"Something clicked in May and we saw a rush of PE firms asking us about MSPs and MSSPs."
Surge in Private Equity Demand for Managed Service Providers
Demand for Managed Service Providers (MSPs) and Managed Security Service Providers (MSSPs) has surged to new highs as Private Equity (PE) firms continue to be attracted to the recurring revenue model.
martinwolf President Tim Mueller was cited in Karishma Vanjani’s article on PE Hub regarding the unprecedented rise in PE demand for MSPs and MSSPs. Mueller explains that the addition of security services to an MSP’s portfolio can grow recurring revenue to over 80 percent—a fact that has driven significant interest among buyers across the martinwolf and IT ExchangeNet network.
Deal multiples for MSPs and MSSPs continueto increase as some firms with significant recurring revenue are seeing multiples above 10x their 12-month adjusted EBITDA.
“Something clicked in May (2020) and we saw a rush of PE firms asking us about MSPs and MSSPs. Our email inbox just started blowing up; we asked each other ‘are you seeing what we are seeing?’” Mueller added.
Vanjani’s piece highlights the “dizzying rate” in which PE firms are acquiring MSPs and MSSPs. Read the full piece here, and if you have any questions about what this means for your business,contact Colin Riley.