M&A activity snapshot
MSP consolidation picked up again in 2026. Omdia counted 64 MSP acquisitions worldwide in Q1 2026, up 73% year over year, including 37 in North America. Omdia also identified 14 managed security services provider deals in the quarter, seven of them backed by private equity.
PitchBook data uses a wider net. Founders Advisors' July 2025 update shows 93 U.S. MSP and IT services buyouts by private equity groups and 94 roll-up or bolt-on deals by strategic acquirers in Q1 2025, after a quieter 2024. The two series count different things, so they should not be added together.
The market these buyers are consolidating is large and fragmented. Omdia's Jay McBain sizes managed services at $608 billion, growing about 13% a year. No agency counts U.S. MSPs directly. The closest proxy is Census data for NAICS 541512, Computer Systems Design Services: 58,113 establishments in 2023. That code also includes integrators and consultants, so it overstates the MSP count.
Who is buying
PE-backed platforms. Omdia found outside investors involved in 80% of MSP and MSSP deals in Q1 2026, up from 68% a year earlier. Omdia's Jessica Davis says recurring revenue is what drew private equity to managed services. The same report notes that Shield Technology Partners, backed by Thrive Holdings, has 19 MSPs in its portfolio and accounted for five MSP-focused deals in Q1.
Holding-company platforms that keep founders in place. New Charter Technologies added NetSource One in January 2026, its 32nd firm since launching in 2020. New Charter keeps local owners running their businesses, while other roll-ups, such as Thrive, fully integrate each acquisition. Sellers who care about their team and brand should ask which model a buyer runs.
Vertical add-ons. Platforms buy MSPs with industry depth. In September 2025, Ntiva acquired Site Tech Services, a Tampa IT provider specializing in automotive dealerships.
Global systems integrators. Accenture launched a midmarket IT services unit, Accenture Edge, in June 2026, adding a large strategic to the buyer pool for larger regional MSPs.
What buyers look for
Buyers re-cut an MSP's revenue by stream. Founders Advisors ranks contracted recurring services and hosting highest, then resold software subscriptions, then consulting and implementation, then hardware. An MSP with heavy hardware resale or project work will be valued on its managed base, not its top line.
Security attach. Kaseya's 2026 survey of more than 1,000 MSPs found 71% grew cybersecurity revenue year over year, the highest of any service category. Buyers favor MSPs that already sell managed detection, backup, and compliance work.
Compliance credentials. A NetSource One executive told Channel Dive that fewer than 10% of MSPs maintain an audited compliance report, most often HIPAA or SOC 2 Type I. That is one executive's estimate, not survey data, but it shows why a current SOC 2 Type II report sets an MSP apart.
CMMC readiness for defense clients. Under the CMMC rule, services an MSP provides to a defense contractor that handle CUI are in the client's assessment scope and are assessed with it. An MSP whose own stack cannot pass becomes a liability to its clients and to a buyer.
An answer on AI. Kaseya found 48% of MSPs rank AI and automation as clients' top 2026 need, but only 13% earn meaningful revenue from it. Buyers want to know whether AI will cut a target's delivery cost or its prices.
What makes a strong company
Founders Advisors' MSP valuation scorecard gives the clearest public benchmarks. Its higher-value column is:
- 80%+ of revenue from managed customers rather than project or one-time work.
- EBITDA margin above 20% and fully burdened gross margin above 50%, measured by revenue stream.
- Customer retention above 95%, with 85%+ customer retention and 90%+ net retention as the benchmarks to track.
- Agreements longer than 24 months rather than under 12.
- No top customer above 20% of revenue and top five below 50%.
Scale also matters. The same scorecard says revenue above $15 million is rare and highly differentiated in this fragmented sector. Most owner-run MSPs below that size are add-on candidates for an existing platform rather than new platforms.
Valuation and deal structure
Founders Advisors charts an observed EV/EBITDA range of about 4x-12x+ for MSPs with strong metrics from 2020 through 2025, compared with about 4x-8x+ in 2019 and earlier. It attributes the expansion to elevated M&A activity. No public provider publishes an MSP median by size band, so treat the range as market data, not a quote for any one business.
For a public reference point, the same report's set of 22 public IT services companies traded at a median 1.8x EV/revenue and 10.7x EV/EBITDA as of March 31, 2025. Those are large-cap companies and sit above what most small MSPs command.
Platform roll-ups usually pay part of the price in seller rollover equity, and some use earnouts tied to post-close revenue retention. The sources above do not quantify how often, so expect the question rather than assume a structure. Working capital, especially prepaid annual contracts, is a frequent negotiation point. To see where a specific MSP might land, use the valuation tool.
Outlook
Expect consolidation to continue through 2027. Omdia's Q1 2026 count shows deal volume rising and investor involvement climbing to 80%. Kaseya's survey shows organic growth getting harder: the share of MSPs whose typical customer spends more than $25,000 a year fell to 41% from 75%. Slower organic growth gives owners a reason to sell and platforms a reason to buy growth.
CMMC adds a dated catalyst. Phase 2, which requires Level 2 third-party certification at contract award, begins November 10, 2026. MSPs that can support defense clients through that process gain value; those that cannot face client losses.
Owners preparing for a sale can read what buyers look for in an MSP, the parent Technology & IT Services overview, and how vertical-focused buyers source deals.