IT Services Company (MSP) Valuation & EBITDA Multiples
MSP / IT services businesses sell for 4x to 14x adjusted EBITDA in 2026, with the N2M Mid-Year 2026 median at 8.9x across 120 transactions. MRR mix is the single strongest driver; CMMC Phase 2 (Nov 10, 2026) is the live repricing catalyst.
Updated 2026-06-05·12 min read·Technology & Tech-Enabled Services
Adjusted EBITDA multiple
4x – 14x
Typical: 8.9x · Sample: N2M Capital Advisors Mid-Year 2026 dataset of 120 MSP transactions (median deal $38.5M); cross-checked against Aventis Advisors tier framework, CT Acquisitions PE-MSP 2026, Solganick MSP/MSSP M&A 2025, and Omdia/Canalys 169 publicly announced 2025 deals
- Adj. EBITDA range (typical → premium cyber)
- 4x – 14x
- Median EV/EBITDA, 120 MSP deals (N2M, 2026)
- 8.9x
- CMMC/MSSP cyber capability premium
- +1–2 turns
- Share of 2025 MSP deals with PE involvement
- ~69–72%
Quick answer
An MSP / IT services business typically sells for 4x to 14x adjusted EBITDA in 2026, with the median at 8.9x across N2M Capital Advisors' 120-transaction Mid-Year 2026 dataset (median deal $38.5M) [2]. Sub-$5M revenue shops trade around 5x EBITDA and carry a ~55% size discount versus large peers (Aventis) [1]; $5M–$20M revenue MSPs cluster at 5–8x for high-quality recurring; $20M–$50M revenue at 8–9x; and platform-tier MSPs above $500M EV clear 11.2x median — 12–15x for cyber-heavy and AI-enabled scaled platforms [1][2]. The 17.5x H1 2021 peak is gone; the median has stabilized around 8.9x–11.4x for the past two years [1].
MRR % is the single strongest multiple driver — 90%+ contractually recurring revenue is the dividing line between platform pricing and commodity break-fix pricing [7]. The second driver is cyber/MSSP and compliance capability: CMMC Phase 2 (C3PAO assessments begin November 10, 2026) means cyber-capable MSPs trade at 10–14x EBITDA vs 4–6x for commodity break-fix — a 1–2 turn premium that is on the clock through 2026 [8]. The dominant buyer pool is PE-backed platforms — Evergreen Services Group / Lyra Technology (Alpine Investors), New Charter Technologies (Oval Partners), Integris (OMERS PE), The 20 MSP, Magna5 (AEA), Shield Technology Partners (Thrive Holdings) — with PE involvement in ~69–72% of 2025 MSP deals [6][10].
Multiples by size
How it services company (msp) multiples shift with EBITDA size
The single biggest determinant of multiple is size. The same business at 4x sub-$1M EBITDA can fetch 7x once it crosses $5M — same operations, different buyer pool.
| Adjusted EBITDA range | Multiple range | What's typical here |
|---|---|---|
| Under $5M Revenue | 4x – 8x | The size-discount tier — Aventis documents a ~55% discount vs large peers; sub-$1M EBITDA commodity break-fix clears 2–4x while high-quality $1M–$2M EBITDA with 80%+ MRR can reach the 6–8x top. Buyer pool is platform tuck-ins (Evergreen, New Charter, The 20 MSP, Magna5) plus individual SBA-financed operators. |
| $5M – $20M Revenue | 5x – 9x | The most competitive add-on tranche for PE platform buyers. Aventis 'high-quality recurring' tier tops out at 8x with 80%+ MRR + vertical specialization. Evergreen, New Charter, Integris, Magna5, and Shield Technology Partners all actively bid here; MSSP/cyber/compliance capability adds 1–2 turns. |
| $20M – $50M Revenue | 9x – 11x | Emerging-platform tier. N2M's mid-year median deal at $38.5M sits in this band at 8.9x. CMMC Phase 2 readiness, vertical compliance moats (healthcare/legal/finance), and 90%+ MRR push toward the top. PE platform recap candidates and strategic acquirers both bid here. |
| $50M+ Revenue / Platform-tier | 11x – 14x | Aventis: 11.2x median for $500M+ EV platform deals; premium cyber/scale exits 12–15x. Solganick documented some 2025 platform exits at ~20x. CMMC Phase 2 catalyst applies most heavily — security-platform MSPs with MDR/SOC, vCISO, and CMMC-as-a-service command the full premium. |
Interactive estimate
Estimate the range for your business
Move the sliders. The estimate reflects how each driver pushes the multiple up or down inside the bands above. Use this as a planning anchor — not a sale price.
The single highest-leverage driver in MSP. Under 50% MRR caps you at break-fix / staffing pricing (3–5x). 60–75% MRR earns the median tier. 80%+ MRR earns the Aventis high-quality recurring premium. 90%+ MRR is the single strongest multiple driver — every PE platform buyer screens on this first.
Cyber-capable MSPs trade 10–14x vs 4–6x for commodity break-fix. CMMC Phase 2 begins November 10, 2026 — the deadline forces every DoD contractor's MSP to certify Level 2 capability. SOC 2 Type II, CMMC Level 2, NIST 800-171, and HIPAA compliance-as-a-service each add to diligence value as separate underwriting line items.
Vertical compliance moats add 1–2 turns. A 50%+ financial services or healthcare concentration is rewarded as defensible expertise, unlike generic commercial concentration which is penalized. A top-quartile illustrative MSP cleared 11x with 54% financial services concentration and CMMC Level 2 readiness.
96%+ logo retention with no customer above 10% earns the top of the band. Logo retention below 90% or top customer above 25% triggers multiple compression and pushes consideration into earnout. Multi-year (24+ month) contracts with auto-renew clauses score higher than month-to-month.
Estimated enterprise value
$12.0M – $18.0M
Implied multiple: 6.0x – 9.0x Adjusted EBITDA
Planning estimate, not a valuation opinion. Real-world MSP outcomes are narrowed by adjusted EBITDA quality (sell-side QoE adds ~0.4x on average per GF Data), MRR contract quality (auto-renew terms, cancellation rights), CMMC/SOC 2 audit status, and the working capital peg. Ad Astra delivers advisor-grade ranges under USPAP/SSVS standards — talk to our team.
Value drivers
What moves the multiple, specific to it services company (msp)
MRR mix 90%+ — the single strongest multiple driver
+1.5x – 2.5xThe single strongest multiple driver in MSP per CT Acquisitions 2026 and Aventis [7][1]. PE platforms underwrite MRR mix as their primary screen — Evergreen's Craig Fulton publicly states 6–8x for typical MRR-led MSPs; the platform-tier 11–14x band requires MRR mix at the top of the distribution [6]. Contracted MRR, auto-renew penetration, and 12-month logo churn are the three data points buyers ask for in the IOI round. A business at 40% MRR will be repriced to staffing multiples; the same EBITDA at 90%+ MRR earns platform pricing — that gap can exceed $5M in enterprise value on a $2M EBITDA book [2].
Cyber / MSSP capability and CMMC Phase 2 readiness
+1.0x – 2.0xCMMC Phase 2 (C3PAO assessments) begins November 10, 2026 — DFARS 252.204-7021 has been active since Nov 10, 2025 [8]. Cyber-capable MSPs with MDR/SOC, vCISO, CMMC-as-a-service, HIPAA/PCI compliance command 10–14x vs 4–6x for commodity break-fix — a 1–2 turn premium that is on the clock through 2026 [8]. Buyers are pricing the CMMC catalyst into security-capable targets now, ahead of the deadline. SOC 2 Type II certification, NIST 800-171 compliance documentation, and CMMC Level 2 audit readiness each stack as independent underwriting line items in PE diligence [7].
Vertical specialization (healthcare / legal / finance / government)
+1.0x – 2.0xCompliance moats stack with cyber capability. Healthcare MSPs (HIPAA + HITRUST), legal MSPs (attorney work-product privilege, e-discovery), and financial-services MSPs (FINRA, SEC Cybersecurity Rule) all command vertical-specialization premiums [7]. An illustrative top-quartile MSP cleared 11x on 54% financial-services concentration — vertical depth turned what would otherwise be a customer-concentration penalty into a compliance-expertise premium [10]. Government-focused and DoD-adjacent MSPs earn the steepest CMMC-related multiple lift given mandatory procurement compliance deadlines.
Logo retention 95%+ with multi-year contracted MRR
+0.5x – 1.5xAventis and Solganick both cite logo retention as a primary multiple driver alongside MRR mix [1][10]. 96%+ logo retention with multi-year (24+ month) contracts and auto-renew clauses earns the top of the band. Logo retention below 90% triggers PE platforms to either compress the headline or push the gap into earnout tied to MRR retention over 12–24 months. Month-to-month contracts — even at high MRR as a percent of revenue — are discounted because the buyer cannot underwrite the annuity durability. Buyers diligence contract terms, auto-renew penetration, and 30-day cancellation rights in the IOI round [2].
Multi-state footprint with documented AI tooling
+0.5x – 1.0xMulti-state platforms attract more demand from PE consolidators looking for in-region tuck-ins, and multi-state licensing is a near-term acquisition barrier that justifies a modest premium. AI is table stakes per C4 Solutions 2026 [9] — buyers do not pay a premium for AI as differentiation, but they will discount targets where AI/automation tooling is absent from the service stack. Document AI tooling, RMM automation, and helpdesk-AI adoption; the capability absence becomes a capability penalty when undocumented during buyer diligence.
Project-heavy revenue / MRR under 50%
-2.0x – 4.0xThe mirror image of the MRR lift. Below 50% MRR, the asset reprices to staffing/break-fix multiples (3–5x) regardless of how strong the project work is [7]. Time-and-materials revenue, one-off cloud migration projects, and staff augmentation engagements all underwrite at staffing multiples — roughly 2–4 turns below an equivalent MRR-heavy book at the same EBITDA [2]. CT Acquisitions: add-on cluster pricing (5–8x) requires the MRR mix to defend it. IT staffing firms that describe themselves as 'managed services' in marketing are repriced at diligence once buyers see <50% MRR penetration [7].
Single-vendor or single-MSA dependency
-1.0x – 2.0xMSPs whose stack is built around a single PSA/RMM vendor (ConnectWise, Datto, Kaseya) or whose capability depends on a single Microsoft/AWS partner relationship for more than 50% of revenue face buyer concern about portability into the acquirer's tech stack. Single-MSA concentration — a one-metro MSP serving a single anchor enterprise — earns less than a multi-state, multi-vertical book even at identical MRR mix and EBITDA. Buyers score vendor diversity and geographic footprint as operational resilience proxies during diligence [7].
Founder-dependent customer relationships
-1.0x – 2.0xThe classic small-MSP drag: owner is the senior account executive on every top-10 customer, owner answers the phone for technical escalations, and owner is the de-facto vCISO. Without a hired GM, Service Manager, and Account Manager bench, PE buyers compress the multiple and shift consideration into an 18–24 month earnout on retention [1]. Sub-$5M EBITDA MSPs feel this most heavily — it is a primary contributor to the 55% Aventis size discount. The structural fix is 60-day replaceability: if you disappeared for 60 days, would every customer relationship survive? [1][6].
Buyer landscape
Who is actively buying it services company (msp)
Named PE platforms, strategic acquirers, and consolidators active in the space in the last 12 months. Multiples paid by these buyers anchor the high end of our range.
Evergreen Services Group / Lyra Technology Group
Alpine Investors
The most aggressive MSP accumulator in the market — Omdia analyst Jessica C. Davis published 'Inside the MSP Market's Largest Acquisition Machine' (April 2026); 120+ MSP transactions since 2017; typically pays 6–8x EBITDA for in-box add-ons; decentralized hold model with mandatory rollover equity.
- Sterling Technology (April 2025)
- OSIT — Western Australia (reported June 4, 2026; non-US deal)
- 120+ total MSP transactions since 2017 across Evergreen and Lyra platforms
New Charter Technologies
Oval Partners
Centralized-integration MSP platform focused on cloud-first, Microsoft/Azure/M365-heavy SMB books with AI and security capability; active Q2 2026 add-on cadence targeting cyber/cloud-capable operators.
- ICG (Florida MSP, founded 1977; cloud-first, security-focused, Microsoft/Azure/M365 emphasis) — announced April 21, 2026
Integris
OMERS Private Equity
SMB-focused MSP platform paying platform-tier multiples for vertical-compliance-heavy MSPs; announced its first international deal in Q2 2026, signaling appetite for geographic scale.
- First Focus (largest SMB MSP in Australia/NZ/Philippines) — announced intent April 27, 2026; non-US; subject to regulatory approval
The 20 MSP
Consortium-driven; Pinecrest Capital Partners as exclusive financial advisor; Sunflower Bank as sole lead arranger of credit facility
Member-network consolidator that acquires MSPs into a shared service-delivery stack; brings tuck-ins from the 5–8x EBITDA band into a platform-quality combined operation at scale.
- Four-MSP simultaneous acquisition announced June 2, 2026: CTS Computers, MashGrape Technologies, Northwest Computer Solutions, Assured Technology Solutions
- Brings total to 48 deals; first acquisitions announced in 2026
Magna5
AEA Investors (recapitalized from NewSpring Capital, February 2026)
Mid-market MSP platform with cloud, communications, and managed-security focus; PE-to-PE recap from NewSpring to AEA in February 2026 marks the platform's second exit cycle and validates platform-tier recap economics.
- Recapitalized by AEA Investors from NewSpring Capital, February 2026
Shield Technology Partners
Thrive Holdings ($100M growth investment, February 2, 2026)
Cyber-led MSP platform funded to continue MSP consolidation; the $100M Thrive growth investment anchors the CMMC-readiness and MSSP-capability buyer thesis in the 2026 market.
- $100M growth investment from Thrive Holdings, February 2, 2026
Pine Services Group / Blue Mantis / Abacus Group + Medicus IT
Alpine Investors (Pine); Recognize Partners (Blue Mantis); FFL Partners (Abacus + Medicus merger, July 2025)
Second-tier PE platforms competing for the same $1M–$10M EBITDA tuck-in pool as Evergreen and New Charter, creating a multi-bidder dynamic that supports top-of-band pricing for quality add-ons.
- Blue Mantis — North Shore Data Services (Recognize Partners)
- Abacus Group + Medicus IT merger, July 2025 (FFL Partners)
- Secur-Serv (Transom Capital) — Micro-Data Systems, third acquisition in 12 months
Strategic IT / Cyber / Cloud Acquirers (LevelBlue, ServiceNow, Bain Capital)
For $25M+ EBITDA platform-tier targets, large-cap strategics and PE enter at 80–95% cash with limited rollover — LevelBlue acquired Trustwave (2025), Bain Capital acquired Inetum ($2B+), ServiceNow acquired Moveworks ($2.85B, March 2025); AI-native, agentic-capable, or security-platform-integration targets command the strategic premium.
- LevelBlue / Trustwave (2025)
- Bain Capital / Inetum ($2B+, 2024)
- ServiceNow / Moveworks ($2.85B, March 2025)
Deal structure
Headline price is one number. The structure is the deal.
The headline multiple gets the press release; the structure determines what you actually take home. In MSP transactions in the $1M–$10M EBITDA range, rollover equity is effectively mandatory at Evergreen, Pine, New Charter, Integris, and most PE platforms — typically 10–20% of consideration (Alpine-affiliated platforms require meaningful equity reinvestment). For sellers evaluating Evergreen-style decentralized holds, the rollover represents the 'second-bite' upside through a 3–7 year hold to the next sponsor recap [6].
Cash at close for MSP platform deals runs 75–85% [10], tilting toward 80–85% for centralized integrators (New Charter, Integris) and toward 75–78% with heavier rollover at decentralized platforms (Evergreen, Pine). Earnouts (5–10%) are most often tied to MRR retention or top-10 logo retention over 12–24 months. Working-capital peg negotiations are unusually fraught in MSP because deferred revenue from annual prepays and multi-year MSP contracts paid up front interacts with the peg in ways that materially benefit one side — pre-negotiate before LOI, not after exclusivity [2].
Typical breakdown
- Cash at close
- 75–85%
- Rollover equity
- 10–20% (typical); 15–30% at Evergreen-style platforms
- Earn-out
- 5–10%
- Seller note
- 0–10%
- Working capital adjustment
- ±2–4%
Senior debt (4–5x EBITDA) plus PE equity check. Centralized integrators (New Charter, Integris) lean 80–85%; decentralized platforms (Evergreen, Pine, Lyra) lean 75–78% with heavier rollover. Strategic buyers (LevelBlue, ServiceNow, Bain on platform-tier) pay 80–95% cash.
Mandatory at Alpine-affiliated platforms (Evergreen / Lyra / Pine) and Recognize / OMERS PE / Oval Partners platforms. Hold typically 3–7 years to next sponsor recap. Second-bite economics are the core seller-side incentive for sellers under 60.
Tied to MRR retention or top-10 logo retention over 12–24 months. More common when customer concentration exceeds 25% or the owner is the senior account executive on top accounts. Sometimes structured as an MRR growth bonus rather than a retention floor.
Uncommon in PE platform deals; common in sub-$5M EBITDA SBA-financed individual-buyer deals (3–5x range). Junior subordinated, 3–7 year amortization.
Unusually fraught in MSP — annual prepay billing, multi-year MSP contracts paid up front, and deferred revenue interact with the peg in ways that materially benefit one side. Pre-negotiate the peg and deferred-revenue treatment before LOI signing.
Recent comps (anonymized)
Representative it services company (msp) transactions
| Profile | Closed | Multiple | Buyer | Structure |
|---|---|---|---|---|
| The 20 MSP simultaneously acquired four MSPs: CTS Computers, MashGrape Technologies, Northwest Computer Solutions, and Assured Technology Solutions. Pinecrest Capital Partners served as exclusive financial advisor; Sunflower Bank as sole lead arranger of the credit facility. | Announced June 2, 2026 | 5–8x EBITDA (band-typical for sub-$5M EBITDA tuck-ins absorbed into platform tech stack) | The 20 MSP (consortium-driven; Pinecrest Capital Partners as financial advisor; Sunflower Bank as credit facility lead) | Terms undisclosed; consortium model with platform tech-stack integration; rollover and earnout on logo retention typical at this archetype |
| ICG — Florida-based MSP founded 1977; cloud-first, security-focused, Microsoft/Azure/M365 emphasis. Marquee Q2 2026 cyber/cloud platform tuck-in. | Announced April 21, 2026 | Undisclosed (platform tuck-in archetype, 5–8x band-typical) | New Charter Technologies (Oval Partners) | Undisclosed; centralized-integration platform with rollover for second exit |
| First Focus — largest SMB MSP in Australia, New Zealand, and Philippines. Integris's first international deal. Non-US flag — US-focused readers should weight The 20 MSP and New Charter/ICG prints more heavily. | Announced intent April 27, 2026; subject to regulatory approval | Undisclosed (cross-border; non-US) | Integris (OMERS Private Equity) | Undisclosed; international deal subject to regulatory approval |
| Magna5 — mid-market MSP platform with cloud, communications, and managed-security focus. PE-to-PE recap validates platform-tier MSP recap multiples remaining healthy into early 2026. | February 2026 | Undisclosed (platform-tier PE-to-PE recap) | AEA Investors (recapitalized from NewSpring Capital) | PE-to-PE recap; platform-tier second exit cycle |
| Illustrative top-quartile cyber-MSP add-on. $14M revenue · $2.8M Adj. EBITDA (20.0% margin) · 78% MRR · SOC 2 Type II + CMMC Level 2 ready · financial services 54% concentration · 96% logo retention · Mid-Atlantic · 41 employees. Illustrative model based on published deal-data ranges. Not a specific client transaction. | 2026 Q1 | 11.0x EBITDA = ~$30.8M EV | PE MSP platform (Evergreen / Blue Mantis / Pine Services class) | 75% cash / 18% rollover / 7% earnout on MRR retention; 95 days post-LOI |
| Illustrative commodity break-fix shop. $3M revenue · $750K Adj. EBITDA · 35% MRR · project-heavy / break-fix · owner-led sales · single metro · no cyber certifications. Illustrative model based on published ranges. | 2026 Q1 | 2–4x EBITDA (SDE-level pricing) | Local consolidator / individual SBA-financed buyer / search fund | 70% cash / 20% seller note / 10% earnout |
Profiles aggregated from public PE press releases and internal Ad Astra advisory data. Cited where attribution is public.
Methodology
How valuation methods apply to it services company (msp)
Comparable transactions — the anchor for MSP, with mandatory size and cyber breakouts
For MSP, the comparable-transactions method is the strongest anchor because the comp set is uniquely deep: 120 transactions analyzed by N2M Capital Advisors Mid-Year 2026; 169 publicly announced 2025 deals tracked by Omdia/Canalys; Aventis maintains a public tier framework updated annually [2][6]. Three breakouts matter most when building the comp set:
(1) Size band — sub-$5M EBITDA at ~5x vs $500M+ EV at 11.2x is a ~55% size discount per Aventis [1]. (2) MRR mix — commodity break-fix at 2–4x vs 90%+ MRR cyber-platforms at 11–15x is the steepest single-driver spread in the dataset [7]. (3) Cyber/MSSP capability — 1–2 turn premium for security-capable targets, on the clock through the November 10, 2026 CMMC Phase 2 deadline [8]. A $2M-EBITDA cyber-capable MSP and a $2M-EBITDA project-heavy break-fix shop should not be in the same comp set — they are different assets underwritten at different PE-platform screens.
DCF — the MRR durability and contract-quality test
DCF is uniquely useful in MSP because the MRR book can be modeled separately as an annuity with explicit assumptions for: (a) contracted MRR by customer (waterfall: contract end dates, auto-renew penetration, 30-day cancellation rights), (b) logo retention rate (industry benchmark 90–96% per Aventis and Solganick [1][10]), (c) MRR-per-seat growth from upsell (vCISO, MDR, compliance-as-a-service attach), and (d) gross-margin trajectory as the platform integrates and gains scale. Breakwater M&A confirms that MSPs with 80%+ MRR command materially higher DCF-derived values than those at 40% MRR on identical reported EBITDA [11].
The trap to avoid: terminal-value sensitivity — MSPs have real reinvestment requirements (PSA/RMM tooling, security stack, vCISO talent, compliance audits) that get understated when DCF models extrapolate margins past 5 years. Anchor terminal value to a market exit multiple — the 8.9x N2M median [2] or 11.2x Aventis platform tier [1] — not a perpetual-growth assumption. Sell-side QoE documentation adds an average of +0.4x to the final multiple by reducing buyer re-trade risk.
Asset-based — the floor check
Asset value — working capital, customer list intangibles, capitalized software, equipment — lands well below operating value for any healthy MSP. Use it as a sanity check: if asset value is within 30% of operating value, EBITDA quality is likely overstated — typically from buried owner add-backs, one-off project margins normalized into recurring, or unsustainable technician utilization assumptions. For distressed or liquidation valuations (rare given the depth of PE bid in 2026), asset-based becomes primary, but in a normal sale process it is a floor check, not the anchor [2][6].
Capitalized internal software development is an important exception: MSPs that build internal portals, dashboards, or automation tooling and expense the engineering cost depress reported EBITDA below what a buyer will normalize. Buyers often agree to capitalize and amortize over a 3–5 year life — and the asset-based review is where this treatment gets surfaced.
Sell-side adjustments
The adjustments that protect — and grow — your reported EBITDA
Each item below is something we expect to debate with a buyer's QoE provider. Document them yourself, with backup, before going to market.
Owner compensation above market replacement
+$100K – $350KMSP owners frequently take $250K–$500K in total comp that would cost an outside GM $150K–$200K and a Service Manager $120K–$150K. Only the excess above market-rate replacement is a legitimate EBITDA add-back — full owner comp is an SDE treatment only. Defend with BLS NAICS 5415 comp data, Glassdoor, or a recruiter quote for the specific role and geography.
Family members on payroll above market rates
+$25K – $150KSpouse on payroll as office manager or bookkeeper at $80–$100K when market is $50–$60K — adjust the delta. Adult children with W-2s but no real role — strip entirely. Document each adjustment with a job description and market comp benchmark to survive buyer QoE scrutiny.
Owner-occupied real estate at non-market rent
+/-$25K – $100KLess common than in HVAC but still seen in MSP. If you own the building and charge below-market rent, the buyer adjusts EBITDA upward to market rent. Above-market rent today inflates EBITDA — strip the excess down to market. Strip or add the delta, never the full rent charge.
Capitalized vs. expensed internal software development
+/-$50K – $200KMSPs that build internal portals, dashboards, or automation tooling and expense the engineering cost in the year incurred depress reported EBITDA while booking the asset on the balance sheet. Buyers often agree to capitalize and amortize over 3–5 years, lifting adjusted EBITDA. Conversely, MSPs that capitalize aggressively to inflate EBITDA face a downward QoE adjustment. Treatment should match how the buyer will run the business post-close.
Customer concentration / top-customer normalization
Multiple compression or earnout structure — not a clean dollar add-backMSP buyers normalize EBITDA for the post-close risk of losing the top customer. If your top customer is 25%+ of revenue, expect either multiple compression (-0.5 to -1.5x) or an earnout on top-10 retention. Vertical concentration (e.g., 54% financial services) is rewarded as expertise depth; single-customer concentration above 25% is penalized as transition risk.
Deferred PSA/RMM/security-stack capex (NEGATIVE adjustment)
-$25K – -$200KThe opposite of an add-back, tracked the same way. PSA/RMM platform upgrades deferred, security stack overdue for refresh, end-of-life client hardware carried on the MSP's own books, and SOC 2 / CMMC audit costs not yet incurred — the buyer deducts those bills from purchase price or working capital peg. Recurring capex is not an accepted EBITDA add-back. Pre-empt with a documented 3–5 year tech-stack roadmap and budgeted audit schedule.
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- [1] MSP Valuation Multiples (2026) — Aventis Advisors
- [2] MSP M&A Valuation Report 2026 (Mid-Year) — N2M Capital Advisors
- [3] The 20 MSP Expands Service Capabilities with Latest Acquisitions — The 20 MSP, June 2, 2026
- [4] New Charter Technologies Expands with ICG to Advance AI, Security and Cloud Capabilities for SMB Clients — PR Newswire, April 21, 2026
- [5] Integris Announces Intent to Acquire MSP First Focus — PR Newswire, April 27, 2026
- [6] Evergreen Services Group: Inside the MSP Market's Largest Acquisition Machine — Omdia (Jessica C. Davis), April 2026
- [7] Private Equity in Managed IT Services (2026) — CT Acquisitions
- [8] Pentagon Issues Cybersecurity Maturity Model Certification (CMMC) Requirements for Defense Contractors — Latham & Watkins, 2026
- [9] PE-Backed MSP Acquisitions: What Operators Need to Know in 2026 — C4 Solutions
- [10] MSP/MSSP Mergers & Acquisitions Report YTD 2025 — Solganick
- [11] MSP & IT Services Valuation Multiples 2026 — Breakwater M&A
Multiple ranges represent typical lower middle market transactions; individual deals may fall outside the band based on buyer thesis, deal structure, and seller-specific factors. This page is informational and not a formal valuation opinion.