Beyond the Horizon: Future-Focused MSP Insights

M&A Focus, Part 2: Getting your house in order

N-able Season 1 Episode 8

In this episode, Pete Roythorne and N-able’s Business Development Director Matt Takhar discuss the importance of getting your house in order for mergers and acquisitions (M&A) in the MSP industry. They highlight the increasing trend of M&A deals in recent years and predict a continued rise in the future. They explain different valuation methods, with a focus on EBITDA-based valuations. They emphasize the significance of factors such as recurring revenue, client base, operational efficiency, and growth potential in determining the value of an MSP. They also discuss the benefits of joining peer groups and seeking outside help when navigating the M&A process.

 

takeaways

  • MSPs need to get their house in order for mergers and acquisitions (M&A) by being aware of market indicators and transforming their business accordingly.
  • Valuation methods for MSPs include market-based valuation, income-based valuation, and EBITDA-based valuation.
  • Factors that influence the value of an MSP include recurring revenue, client base and retention, service offerings, expertise, operational efficiency, and growth potential.
  • Joining peer groups and seeking outside help can provide valuable insights and support during the M&A process.
  • Merging two companies requires careful consideration of culture, communication, and managing change.

 

Disclaimer: This podcast provides educational information about issues that may be relevant to information technology service providers. Nothing in the podcast should be construed as any recommendation or endorsement by N-able, or as legal or any other advice. The views expressed by guests are their own and their appearance on the podcast does not imply an endorsement of them or any entity they represent. Views and opinions expressed by N-able employees are those of the employees and do not necessarily reflect the view of N-able or its officers and directors. The podcast may also contain forward-looking statements regarding future product plans, functionality, or development efforts that should not be interpreted as a commitment from N-able related to any deliverables or timeframe. All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.