Sell my MSP or IT services business
Managed services has been one of the hottest acquisition categories in the lower middle market for years, and the appetite hasn't cooled. If you've built a real book of recurring contracts, there are buyers competing for it. Here's what your business is likely worth, who's buying, what moves the price, and how to run a sale that actually gets you a fair number.
What MSPs and IT services businesses sell for
Almost every MSP gets valued the same way: a measure of profit times a multiple. For owner-run shops, that profit figure is usually Seller's Discretionary Earnings (SDE), which is net profit plus your salary and personal add-backs. For larger providers with a management team in place, buyers use EBITDA (earnings before interest, taxes, depreciation, and amortization). You'll hear people talk about revenue multiples in this space too, but that's mostly shorthand. What a serious buyer actually underwrites is the quality and durability of your earnings, and above all the recurring portion of them.
As an indicative range, MSPs and IT services businesses tend to trade around 5.0–9.0x EBITDA in the lower middle market. That spread is wide on purpose. Two MSPs with identical earnings can sell for very different prices, and the thing that separates them more than anything else is monthly recurring revenue. A provider where most of the revenue is contracted MRR with low churn lands toward the top of that range. A project-heavy or break-fix shop with lumpy, one-off revenue lands toward the bottom. Buyers will pay up for predictability, and recurring contracts are the cleanest form of it.
| Business profile | Indicative multiple | Basis |
|---|---|---|
| Project or break-fix heavy, lumpy revenue, owner-dependent | ~5.0x | EBITDA |
| Mixed managed & project work, moderate MRR base | ~6.0–7.0x | EBITDA |
| High MRR, long contracts, low churn, runs without owner | ~7.5–9.0x | EBITDA |
Indicative lower-middle-market ranges, not a valuation. See our EBITDA & SDE multiples by industry report for the full breakdown, or run your numbers through the valuation calculator.
Who's buying MSPs right now
The demand side is what makes managed services interesting. Several kinds of buyers are active, and they don't all value your business the same way.
- Private-equity-backed MSP platforms and roll-ups. Investment firms have spent years assembling regional and national managed-services platforms, and they are the most aggressive buyers in the category. They acquire a strong anchor MSP in a market, then bolt on smaller providers around it. Because they're buying scale and recurring revenue, they'll often pay the most, especially if you fit a platform's geography or vertical focus.
- Larger MSPs. Established providers buy to add density in markets they already serve, to pick up a new vertical, or to absorb a capability like cloud, security, or compliance they'd rather acquire than build. They know the model cold, so diligence can move quickly, and they value a clean recurring base and a team they can keep.
- Strategic acquirers. Software companies, IT distributors, and telecom or cloud providers sometimes buy MSPs to move downstream into services and own the customer relationship. They can pay well when your client base or stack lines up with their strategy.
- Search funds and individual operators. For smaller shops, you'll also see motivated individual buyers and search funds looking to own and run an established business. They tend to pay less than the consolidators but can be a good fit if you care who takes over.
The practical takeaway: don't sell to the first person who calls. Different buyers will value the same recurring revenue differently, and the only way to find out who values yours most is to put it in front of several of them at once.
What drives an MSP's multiple
Where you land in that 5.0–9.0x range comes down to a handful of things buyers underwrite carefully.
- Recurring revenue mix. This is the big one. The higher the share of your revenue that's contracted, monthly, and managed rather than project or break-fix, the higher your multiple. Buyers want to see MRR they can count on after you're gone.
- Contract length and structure. Multi-year agreements with auto-renewal beat month-to-month handshakes. Longer, well-documented contracts that transfer cleanly to a new owner give a buyer confidence the revenue stays put.
- Churn. Low logo and revenue churn is the proof point behind your MRR. A provider that loses very few clients year over year is worth far more than one with a leaky base, even at the same revenue.
- Tech-stack standardization. A standardized, documented stack across your client base, the same RMM, PSA, backup, and security tools deployed consistently, makes the business far easier to integrate and scale. Snowflake environments where every client is configured differently are a discount.
- Customer concentration. If one or two clients make up a big slice of revenue, that's a risk a buyer prices down. A broad, diversified base of mid-sized contracts is steadier and prices better.
- Technician and engineer retention. Skilled staff is the constraint in this industry. A stable, tenured team that's likely to stay through a transition is worth real money. High turnover scares buyers who know how hard the talent is to replace.
- Security and compliance mix. Providers with a real managed-security practice, or who serve regulated clients with compliance needs, often command a premium. That work is stickier, higher-margin, and harder for a client to take in-house.
You can move several of these before you ever go to market. That's the whole idea behind building value before you sell. A year or two of converting project clients to managed agreements, tightening contracts, standardizing your stack, and reducing your own role can shift you a full turn or more of EBITDA.
The selling process and timeline
Selling an MSP isn't one event. It's a process that, done right, takes most owners somewhere between six and twelve months. Here's the shape of it:
- Get a real valuation. Start with an honest number based on your actual financials, your recurring-revenue mix, and current comps, not a guess or a number a peer in a Facebook group quoted.
- Prepare. Clean up the books, pull together your contract schedule and MRR detail, document your tech stack and processes so the business doesn't live in your head. This is also where you fix anything that's obviously dragging the multiple down.
- Go to market. A specialized advisor packages the business, reaches out to qualified buyers confidentially, and runs a process so you're comparing offers rather than taking the only one.
- Negotiate and sign a letter of intent. You pick a buyer, agree on price and structure, and move into exclusivity.
- Diligence and close. The buyer verifies everything, and for an MSP that means real scrutiny of your contracts, churn, and recurring revenue. Clean records make this stretch fast; messy ones make it painful. Then you close and get paid.
The single biggest thing that speeds all of this up is preparation. MSPs with documented contracts, clean financials, and a standardized stack move through diligence faster and lose fewer deals along the way.
You don't need to pay a big retainer to find out
A lot of owners assume hiring an M&A advisor means writing a fat retainer check before anyone's even valued the business. That's the old model, and it's not your only option. Plenty of capable advisory firms work on a success basis. They get paid when your deal closes, not before. That structure keeps everyone pointed at the same goal: closing your sale at a good price.
The hard part has always been figuring out which firms are any good, which ones actually close MSP and IT services deals, and which ones will take you on at your size without a big upfront fee. That's the gap we built ProCloser to fill.
How ProCloser matches MSP owners to vetted advisors
Tell us about your business: size, market, how much of your revenue is recurring MRR versus project work, your churn, roughly where your earnings land. We match you with vetted M&A advisory firms that close deals in managed services and IT, including no-retainer, success-only options. You get an introduction and a free, confidential indicative valuation as part of the process. From there you decide who, if anyone, to work with.
It's free to sellers and it's confidential. No obligation, no retainer to find out what your business could be worth and who'd want it.
New to all of this? Start with the broader guide to selling your business, then come back and get matched when you're ready.
MSP & IT services seller FAQ
What is my MSP worth?
Take your normalized annual profit (EBITDA, or SDE for a smaller owner-run shop) and apply a multiple. As an indicative range, MSPs and IT services businesses tend to trade around 5.0–9.0x EBITDA. A provider with a high share of monthly recurring revenue, long contracts, low churn, and a standardized stack sits toward the top; a project-heavy or break-fix shop that leans on the owner sits toward the bottom. Run your numbers through the valuation calculator, then get it reviewed for a defensible figure.
What multiple do MSPs sell for?
As an indicative range, roughly 5.0–9.0x EBITDA in the lower middle market. A high percentage of monthly recurring revenue, multi-year contracts, low churn, a standardized tech stack, and a security or compliance practice push you toward the high end. Heavy project and break-fix work, customer concentration, and owner dependence pull you toward the low end.
Who buys MSP and IT services businesses?
The most active buyers are private-equity-backed MSP platforms and roll-ups consolidating managed services, larger MSPs adding density or capability, and strategic acquirers such as software and IT distributors moving into services. Search funds and individual operators also buy smaller shops. Each values your recurring revenue differently, which is why running a competitive process matters.
How do I sell my MSP?
Get a realistic valuation, clean up your financials, document your contracts, tech stack, and processes so the business doesn't depend on you, then run a confidential process with multiple qualified buyers. A specialized advisor handles the marketing, outreach, negotiation, and diligence. Get matched with a vetted firm, including no-retainer options.
How long does it take to sell an MSP?
Plan on roughly six to twelve months from decision to closing, sometimes longer. Preparation can take a few months, marketing and negotiation usually run two to four, and diligence and closing add another two to three. Clean books, documented contracts, and a standardized stack move things along.
See what your MSP is worth.
We'll match you with a vetted M&A advisor who closes MSP and IT services deals, and give you a free, confidential indicative valuation. Free to sellers. No retainer to find out.
Tania leads ProCloser's network of vetted M&A advisory firms and works with business owners every week on valuation, fit, and getting matched to the right advisor to sell. Get matched free.