The Market is Undeniably Hot

Let’s start with the obvious: deal activity in the power sector has gone parabolic.

After a two-year hangover from the 2022-2023 rate hike cycle (when corporate buyers pulled back and deal counts dropped nearly 30% from their 2021 peak), the market came roaring back. Electrical contractor M&A volume climbed 13% in 2024, average deal sizes nearly tripled, and by 2025, U.S. power and utilities deal value had exploded to $141.9 billion, up from roughly $28 billion the year prior.

Yes, some of that headline number is driven by mega-deals: Constellation/Calpine ($29B), NRG/LS Power ($12.5B). But look past the megacaps and the story is the same. PE firms closed more electrical construction deals in the first half of 2025 alone than they did in all of 2024. The U.S. electrical contracting market (a $255 billion industry growing toward $295 billion by 2030) has become one of the most sought-after sectors in the entire PE landscape.

The tailwinds are durable: an aging grid requiring comprehensive modernization, AI-driven power demand rewriting utility load forecasts, and a generational shortage of skilled tradespeople that makes acquiring a workforce more efficient than building one. The consolidation wave is not cresting. It is still building.

Valuations Are at Historic Highs

Public power services and electrical infrastructure companies are trading at a significant premium to their 5-year historical EV/EBITDA averages. Quanta, Comfort Systems, MYR Group, MasTec, EMCOR, IES Holdings, Primoris, Dycom, and Vertiv (the peer group that institutional buyers anchor private market deals to) have all re-rated substantially since 2022.

The chart below illustrates the peer group’s annual average EV/EBITDA multiple from 2020 through 2025, compared to the 5-year historical average of 14.2x. The current trading multiple of 19.6x represents a 38% premium to that historical benchmark.

When buyers underwrite private market deals, these are the benchmarks they start from. That premium is bleeding through to private transactions, and for owners of sub-$250M businesses, it is creating a window that does not come around often.

New Money Is Flooding the Space

The most important shift in the power services M&A market is not the volume of deals. It is who is doing them.

Traditionally, this was infrastructure fund territory: Brookfield, Macquarie, GIP writing large checks for regulated utilities and long-duration assets. That has changed. Today, traditional B2B-focused PE firms are competing aggressively for power services platforms, and the names are impossible to ignore. TPG paid an estimated ~$5 billion for Pike Corporation. Blackstone wrote a $1.6 billion check for Shermco. Apollo moved on both The State Group and PowerGrid Services in the span of six months.

It is not just the megafunds. Mid-market firms are just as active, and arguably more relevant to the lower middle market. Kohlberg acquired both RESA Power and Loenbro within the same year. Searchlight Capital has built Integrated Power Services into a national platform through 26 acquisitions. Each of these firms came to the space with a different thesis, a different target profile, and a different vision for where power services is headed.

The upstream deals are having a downstream effect. When Shermco trades at $1.6 billion and RESA quadruples in value in three years, it sends a clear signal to the broader market: scaling a power services business will be rewarded. We are already seeing that confidence translate. Platte River Equity’s acquisition of United Utility Services is a direct example of lower-middle market and middle market capital chasing that same thesis. These are not isolated data points. They are early proof of concept for a wave of platform-building that, in our view, is still in its early innings.

The Theme to Watch in 2026: Bring Your Own Power

Power demand is growing at a pace the grid was not built to handle, and everyone in the industry knows it. At PowerGen and DistribuTech this year, one conversation kept coming up: how do you actually secure power for a data center when every traditional path is blocked? Nuclear is a decade away. GE Vernova’s gas turbine backlog stretches into 2029. Grid interconnection queues in key markets exceed eight years. In January, Trump made the political stakes explicit, directing data center operators to fund their own power rather than pass costs to consumers.

The market is starting to respond. Kodiak Gas Services’ $675M acquisition of Distributed Power Solutions is a clean expression of where capital is going: 384 MW of distributed generation already serving data centers at 99.9% reliability, no grid queue, no decade-long backlog. Fast, behind-the-meter, and already working. It will not be the last deal of its kind.

2026: The Window Is Open

Every indicator points the same direction. Deal activity is accelerating, valuations remain at historic highs, and the buyer pool has never been deeper or more competitive. The secular tailwinds (grid modernization, AI-driven power demand, the BYOP buildout) are not a 2026 story. They are a decade-long story, and we are in the early chapters.

Founders will be at PowerTest in Nashville at the beginning of March and would love to connect. Please reach out to Evan Klisares if you’re planning to attend.

Data sources: PwC, Capital IQ, PitchBook, BMI Mergers, public company filings. Chart data reflects peer group annual average EV/EBITDA multiples for Quanta Services, EMCOR Group, MasTec, MYR Group, Comfort Systems USA, IES Holdings, Primoris Services, Dycom Industries, and Vertiv.

What took place was more than just a retreat. It was a sacred space of formation, a time set apart for men in their 20s and 30s who sense a call to steward their gifts and build lives of Kingdom influence.

Organized by Duane Donner and a circle of Birmingham business leaders, with the help of a prayerful facilitation team, the H2 weekend was designed to help each man slow down long enough to hear from God, reflect deeply, and leave with renewed clarity and conviction.

Between powerful moments of teaching, transparent testimonies, and Spirit-led discussions, men found themselves wrestling honestly with their purpose, their past, and their potential. Around the fire late into the night, over shared meals, and in quiet moments alone with the Lord, many encountered freedom, healing, and fresh vision for the road ahead.

Each session was intentionally biblical and deeply practical, pointing back to abiding in Jesus as the source of true leadership. The heart of H2 is simple: to raise up leaders of integrity who lead from a place of surrender, strength, and spiritual depth.

Heritage Beginnings is an extension of the Heritage Forum, birthed from the same desire to equip leaders to build legacies that matter, but specifically focused on the next generation. It’s for young men who want to live with eternal impact, lead with humility, and finish well.

If you’re a young man in your 20s or 30s who’s hungry for more, more of God, more clarity, more purpose, or if you know someone who is, we’d love to connect. Reach out to B.J. Davis or William Gray to learn more or nominate someone for a future retreat.

The next wave of Kingdom leaders is rising, and Heritage Beginnings exists to help them take their next step.

Most companies are valued by applying a multiple to the businesses EBITDA (earnings before interest taxes, depreciation, and amortization). However, buyers will closely examine the revenue streams generating that EBITDA and assess the quality thereof. Here are a few things buyers will look for when assessing a company’s revenue streams.

1. Revenue Consistency

The more stable and predictable the revenue stream and the profit therefrom, the more the buyer will be willing to pay. This provides forward visibility and mitigates risk, because the revenue can be counted on in the future with a high degree of certainty. Most subscription models would fall into this category. Assuming customer churn is low, and the lifetime value of the customer outweighs the customer acquisition costs, buyers will pay up for this type of business model. On the flip side, earnings generated from project based work or one-time events will typically be heavily discounted.

2. Customer Diversity

One strong customer can get a business up and going, but diversity is required to mitigate risk. This also applies to customer concentration within revenue streams. If the revenue stream would suffer meaningfully due to the loss of one or two customers, buyers will take this into account. Customer concentration will not only lower the value of a company but might scare off buyers altogether.

3. Margins

Buyers will pay great attention to a company’s margins and assess the overall business by comparing margins to like companies. Superior margins oftentimes mean a competitive advantage, which gives a buyer greater comfort that the revenue and profit therefrom is protected.  In addition to looking at a company’s overall margins, buyers will assess the margin contributed by each revenue stream.  Growth in revenue streams with higher margins will be rewarded, while revenue with lower margins, even if growing, will often be discounted.

Conclusion

These are important factors to consider when operating and growing your business. Yet, every company and industry is different and not every business model can have the recurring revenue and customer diversification of Netflix. If you want to know how you measure up in these areas, benchmark yourself against competitors or companies with a business model similar to your own. Taking action to improve and be the best among your peers in these areas will not only increase the value of your company, it will mitigate the risk you have as an owner.

The Managed Services and IT Services landscape is undergoing rapid transformation, driven by rising customer expectations, evolving delivery models, and increasing demand for value-added solutions. These shifts are fueling a wave of consolidation across the industry.

MSPs Positioned as Strategic Partners

MSPs have evolved from reactive IT support providers to embedded strategic partners. Clients now rely on MSPs to lead modernization efforts, accelerate digital adoption, and shape long-term technology roadmaps. The relationship is increasingly consultative, with MSPs enabling competitive differentiation through IT-driven innovation. MSPs who act as strategic partners, rather than vendors, drive sticky client retention and stronger valuations.

Automation of MSP Service Delivery

To scale efficiently and protect margins, MSPs are investing heavily in automation. Tasks like provisioning, ticketing, billing, and patch management are being streamlined through integrated PSA and RMM platforms. Automation is now table stakes for differentiation, driving consistency and enabling smaller MSPs to compete more effectively. Doing so successfully is a strong strategy to growing gross margins and enabling your team shift focus to higher value services.

Cybersecurity Front and Center

Security has become the most critical service category. Leading MSPs are embedding cybersecurity into every engagement, offering advanced services like MDR, XDR, SASE, and Zero Trust frameworks. 24/7 SOC support and layered security bundles are now baseline expectations as clients prioritize cyber resilience and regulatory compliance. Bad actors continue to increase and get more creative, keeping clients secure and connected is the first-order priority.

Rising Compliance Complexity

Regulatory scrutiny continues to intensify, especially in healthcare, finance, and government. MSPs that provide turnkey compliance frameworks, governance support, and audit readiness are in high demand. Vertical specialization and repeatable toolkits are emerging as key differentiators. Industry specialization isn’t a must, but certain ones require specific subject matter expertise.

Talent Shortage

Labor constraints remain acute. MSPs are expanding delivery via global teams and investing in upskilling programs focused on cybersecurity, cloud, and AI. AI is also being leveraged to augment less experienced staff, driving efficiency while maintaining service quality. Investors view employee retention as a core proxy for company culture, and minimizing turnover of key employees remains a core theme.

Ecosystem Integration & Marketplaces

SaaS and hyperscaler marketplaces (e.g., AWS, Microsoft, Google) are becoming central to solution delivery. These platforms streamline procurement and enable bundling of third-party tools. Channel automation and distributor integration are also reshaping the MSP go-to-market model.

Conclusion

Following a quieter M&A environment in 2024, transaction activity is rebounding in 2025. MSPs are increasingly pursuing M&A as a faster, more scalable path to new capabilities. If you’re considering strategic alternatives for your MSP or IT Services business, please contact me or another member of Founders’ Technology team.

For entrepreneurs selling their business or pursuing a capital partner, a signed LOI (“letter of intent”) can feel like winning a game. While executing an LOI and moving into exclusivity with a buyer is a great accomplishment, there are still important negotiations and work that goes into the due diligence and closing phase.

After the upfront data sharing, conversations, negotiation, and deal fatigue, it’s tempting to coast, however, the due diligence and closing phase is more like the final quarter of a game. This final sprint requires meaningful effort, and without the right M&A advisor, sellers can make mistakes that cost real money, reputation, and even the deal itself.

Several pitfalls for sellers to avoid in the closing phase include:

Dropping the Ball Operationally

A surprise dip in revenue, slowdown in pipeline conversion, or spike in churn will raise immediate questions from a potential buyer or investor. While you may be able to explain these away, there is risk for a re-trade in the deal terms, a delayed closing timeline to ensure improvement, or a buyer walking away from the deal. Leverage an M&A advisor to lighten the diligence load and project manage third party diligence teams so you and your team can focus on running the business.

Failing to Align Internal Stakeholders

Employees, co-founders, or minority investors can become blockers if their expectations or incentives haven’t been managed appropriately. You should work with your M&A advisor and broader deal team to develop the right message for each of these constituents and consider the right time to bring these folks “under the tent.” Without ensuring alignment from internal stakeholders at the right time, you can unintentionally create hurdles to closing the deal (or at minimum, ill will and fractured relationships).

Supplying Incomplete or Unreliable Information

Buyers will complete a variety of unique diligence workstreams, many of which are led by third-party teams, and these groups rely on organized, accurate data. If information is missing or inaccurate, particularly in key areas, it can raise red flags, slow down the closing process, or even cause a buyer to walk away. Reliable data and thorough responses not only builds buyer trust but also reduces the risk of post-close disputes or liabilities. Experienced M&A advisors help sellers understand the level of detail needed to close the deal, organize your company’s information, and efficiently project manage this phase of the process.

Underestimating the Complexity of Legal Documentation

Closing documentation and agreements require meticulous legal drafting, negotiation, and coordination. Without experienced legal counsel, critical details can be overlooked, key protections may be missed, and the entire process can become disorganized or stall. Experienced M&A counsel not only ensures that shareholder input is properly incorporated but can also drive the certainty and speed at which the deal closes. Without this expertise, deals are far more vulnerable to delays, disputes, or even failure.

Neglecting Post-Close Planning

Unrepresented sellers focus intensely on completing the deal—responding to diligence requests, negotiating terms, and meeting closing deadlines—and can overlook critical post-close planning. It is important to take the time to fully understand and align the post-close integration process with you and your team’s goals. This includes discussing how the first few months will unfold, the roles and responsibilities of all parties, and how the transition can be effectively communicated to internal teams. These challenges are avoidable when founders engage in thoughtful planning, collaborate closely with their future partner, and seek guidance from experienced M&A advisors early in the process.

Selling your software business is more than just a financial transaction—it’s the realization of years of innovation, execution, and hard work. At Founders Advisors, we specialize in guiding sellers through a customized M&A process that aligns with their goals and ensures the best possible outcome for shareholders, the team, and business. If you’re considering a sale or recapitalization of your SaaS business, contact a member of our Technology team to learn how Founders Advisors can help you achieve your goals.

You started your roofing company with grit, hustle, and determination. You were the salesperson, the scheduler, the project manager, the head of quality control, and the check collector.

But now the business is growing – or maybe it’s stalled out – and the way you’ve been operating isn’t cutting it anymore. You’re stuck in the weeds, overwhelmed, and maybe even a little burned out. What got you here won’t get you there.

To scale your roofing business and build something that lasts, you don’t need more hustle. You need a mindset shift: from contractor to CEO.

Here’s how to make that leap and unlock real growth.

Think Like a CEO, Not a Tradesperson

Most roofing companies start with a skilled tradesperson getting busy enough to go out on their own. But too often, the owner stays trapped in the day-to-day work instead of stepping into leadership.

The mindset of a CEO is different:

• You’re not just looking at the next job – you’re thinking 12-24 months ahead.
• You’re not trying to do everything yourself – you’re building a team that can.
• You’re not reacting to problems – you’re putting systems in place to prevent them.

It doesn’t mean you stop caring about quality. It means you start caring just as much about scalability.

​​​​​​Define the Business You Actually Want to Build

Growth for growth’s sake isn’t the goal. What does success really look like for you?

• Do you want to triple your revenue with multiple crews across multiple markets?
• Do you want a lean, highly profitable company that runs with minimal oversight?
• Do you want to step away from daily operations completely in a few years?

Knowing your “why” and your destination helps you make better decisions now. Every hiring decision, system, and investment should move you closer to that vision.

Delegate to Multiply Your Time and Impact

If you’re stuck doing $20/hour tasks, you’re capping your business at that level.

CEOs ask: “Where am I spending time that someone else could do better or more efficiently?” Then they delegate it. Sales appointments, scheduling, materials ordering, even project management – these are roles you can train and hand off.

You don’t need to be the hero. You need to be the architect. When your company runs on systems, not heroics, you have something you can scale, and if you want to sell one day, your business will be ready to handoff.

Build Leaders, Not Just Labor

One of the biggest unlocks in scaling your business is growing people who think for themselves. That starts with giving them room to lead.

Train your foremen to handle conflict. Teach your office manager to manage customer expectations. Let your sales team own their numbers.

When people are empowered, they become invested. And when you’re surrounded by leaders, you stop being the bottleneck.

Make Time to Think and Plan

Most roofing business owners are in permanent firefighter mode. But CEOs make time to think.

Block off time to work on the business – not in it:

• Review numbers
• Plan strategy
• Map out hiring needs
• Solve recurring operational problems

If you don’t slow down to evaluate and plan, you’ll just keep sprinting in circles.

Obsess Over Your Numbers (In a Good Way)

You can’t manage what you don’t measure. Growth-minded CEOs know:

• Revenue goals
• Gross profit margin targets
• Close rates
• Marketing Return on Advertising Spend (ROI)
• Bottom Line Profit (EBITDA)

These numbers aren’t just data – they tell the story of your business. The more you understand them, the more confidently you can steer the ship.

Stay Coachable and Keep Learning

Every stage of business growth demands a new version of you. The same strategies and mindset that got you to $1M won’t get you to $5M.

Read books. Hire coaches. Listen to podcasts. Surround yourself with people who think bigger and operate at the next level. The most successful CEOs are always learning.

Check out The E-Myth Revisited by Michael Gerber on Audible to listen on-the-go in the truck from job site to job site.

Final Thoughts: Growth Isn’t Just Strategy. It’s Identity.

To scale your business, you don’t just need better systems or more leads. You need to become the kind of leader who can run a scalable company.

That shift starts in your head.

When you begin thinking and acting like a CEO – even before your business “looks” like it needs one – you’ll start to see the results compound. Your team will perform better. Your systems will tighten up. Your stress will decrease.

And your business? It will finally have the leader it needs to grow.

Want to learn more?

• Get more insights
• Connect with Wayne on LinkedIn
• Book a call with Wayne​​​​​​

Grid Modernization for Growing Datacenter Demands

The conference showcased several groundbreaking initiatives focused on upgrading grid infrastructure to support the exponential growth in datacenter power requirements. Utilities and grid operators presented roadmaps for capacity expansion in key datacenter hubs, acknowledging that traditional grid planning cycles can no longer keep pace with the rapid deployment of new facilities.

“We’re seeing unprecedented collaboration between utilities and datacenter operators,” noted one industry expert during a panel discussion. “The days of simply applying for power and expecting the grid to accommodate are over. Today’s datacenter planners are becoming active participants in grid development.”

Renewable Integration Without Compromise

Perhaps the most discussed topic was how datacenters are balancing their commitment to renewable energy with the need for 24/7 reliability. Several presentations highlighted innovative power purchase agreements (PPAs) that combine solar, wind, and other renewable sources with advanced storage systems to deliver consistent power profiles.

Conference attendees were particularly interested in case studies of datacenters that have achieved high renewable penetration while maintaining the strict uptime requirements their customers demand. The consensus seems to be that a multi-layered approach—combining on-site generation, utility-scale renewables, and strategic storage deployment—offers the most promising path forward.

Microgrids: The Datacenter Resilience Solution

Microgrid technology emerged as a star solution for datacenters seeking both sustainability and reliability. These self-contained electrical networks allow facilities to operate independently from the main grid when necessary, providing critical backup during outages while also enabling more efficient use of locally-generated renewable energy.

Demonstrations showed how advanced control systems enable seamless transitions between grid-connected and islanded operation, reducing reliance on diesel generators while maintaining the same or better reliability metrics. For datacenters in regions with fragile grid infrastructure, these capabilities represent a game-changing approach to power security.

AI-Powered Grid Management

Artificial intelligence was everywhere at DISTRIBUTECH, with particular focus on its applications for predicting and managing the complex load patterns created by modern datacenters. Power quality management systems embedded with machine learning can now anticipate potential issues hours or even days in advance, allowing for preemptive measures that prevent costly downtime.

For datacenter operators, these technologies offer unprecedented visibility into their electrical systems and interaction with the wider grid. Real-time dashboards displayed at the conference showed how AI-enhanced monitoring can detect subtle patterns that human operators might miss, from early indications of equipment failure to opportunities for demand response participation.

Regulatory Landscape and Market Evolution

The conference also featured extensive discussion of regulatory developments affecting both utilities and large power consumers. With datacenters now representing significant portions of load in many regions, regulators are rethinking frameworks for cost allocation, reliability standards, and renewable energy credits.

Several sessions explored emerging market mechanisms that allow datacenters to monetize their flexibility through demand response programs and ancillary services. These approaches transform datacenters from passive consumers into active grid resources, creating new revenue streams while supporting overall system stability.

Looking Ahead: Collaboration is Key

If one theme united the diverse topics at DISTRIBUTECH, it was the need for deeper collaboration between datacenters and grid operators. The traditional customer-supplier relationship is evolving into a partnership model where information flows freely in both directions, enabling more efficient planning and operation.

As one keynote speaker put it: “The future belongs to those who recognize that datacenters and the grid are part of the same ecosystem. Success requires thinking beyond the meter.”

For companies operating at this critical intersection, the opportunities are enormous—but so are the challenges. Those who can navigate the technical, financial, and regulatory complexities will find themselves well-positioned in an increasingly power-hungry digital economy.

The Managed Service Provider (MSP) and IT services sector is experiencing rapid consolidation as companies seek growth, diversification, and scale. Successfully navigating a sale requires thoughtful preparation, strategic positioning, and access to the right buyers. At Founders Advisors, we specialize in guiding MSP owners through every stage of the M&A process, ensuring a seamless transaction while highlighting the unique strengths and opportunities within their business. Here’s how we help MSPs achieve the best possible outcome.

Pre-Engagement: Laying the Foundation for a Successful Sale

Valuation & Market Positioning

Understanding the key drivers of valuation is critical for MSP owners preparing for a sale. Our team provides a comprehensive valuation analysis and guidance on where their MSP is positioned in the market. This pre-engagement work ensures that MSP owners can later enter into exclusivity with a buyer with confident, realistic expectations.

Navigating Market Trends to Optimize Timing

Market conditions play a crucial role in determining the right time to sell. Our MSP-focused sector coverage team continuously monitors the industry, buyer activity, and valuation trends to help MSPs capitalize on favorable market dynamics. By aligning timing with the market opportunity, we can create a tailored market process that maximizes value at the time of sale.

Identifying Key Value Drivers & Areas for Improvement

We work closely with MSP owners to assess their business’s key strengths and potential areas for improvement. By identifying value enhancers – such as strong recurring revenue, high customer retention, and scalable service models – we ensure the business is positioned attractively for buyers. Additionally, we provide guidance on mitigating potential risks, such as customer concentration, undiversified services mix, overdependence on a specific vendor, key man risk, allowing MSPs to proactively strengthen their business before going to market.

Providing Sellers with a Clear View of the Buyer Landscape

Understanding the different types of buyers and their investment criteria is essential to securing the best outcome. Founders Advisors leverages deep industry expertise and an extensive network to provide sellers with insights into private equity firms and strategic acquirers. Our team helps MSPs understand what different buyers prioritize – whether it’s financial performance, operational scalability, or technology capabilities – ensuring the right fit for both the seller and the buyer.

Engagement: Driving the Process to Maximize Value

Strategic Underwriting & Packaging of Your MSP

Our team takes a structured approach to underwriting MSP businesses by developing compelling, data-driven marketing materials. We craft detailed documentation that provides buyers with a comprehensive understanding of the company, including its history, investment highlights, differentiators, service offerings, operational processes, addressable market, and financial profile. By presenting a well-rounded, strategically positioned narrative, we reduce uncertainty, increase buyer confidence, and drive competitive interest.

Financial Documentation & Transparency

Clear and well-organized financial documentation is critical in M&A transactions. We work closely with MSP owners to provide accurate financial information and the key metrics that buyers need to put forth bids with conviction. Our work with the MSP’s financial information increases credibility, accelerates due diligence, and can help with positioning the MSP as a high-quality acquisition target.

Creating a Competitive Market for MSP Sellers

When executing a sales process for MSPs, we don’t just introduce the company to buyers – we create a competitive market to maximize value. Leveraging our extensive relationships with both strategic and financial buyers, we generate offers to increase seller leverage and drive optimal deal terms. Our tailored market process, strategic marketing, and industry expertise ensures that MSP owners receive not just a sale of their business, but the best possible outcome that aligns with their long-term goals.

Streamlining the Due Diligence Process

A well-prepared seller significantly reduces friction during due diligence. Founders Advisors assists MSP owners in organizing financial records, contracts, compliance documentation, and operational data before buyers engage, ensuring a smooth and efficient transaction. By proactively addressing potential questions and gathering data needed for diligence, we minimize delays and enhance buyer confidence while they conduct due diligence.

Maintaining Business Performance During the Sale Process

One of the most critical factors in a successful transaction is the company maintaining its financial and operational performance throughout the M&A process. We work closely with MSP owners to ensure they remain focused on running their business while we handle the complexities of the sale. Our process allows owners and management to continue executing during the sales process, which can further strengthen the company’s value and buyer confidence.

Ensuring Strategic & Cultural Alignment

Beyond the performance of the MSP, alignment between buyers and sellers is key to long-term success. Our team facilitates discussions around strategic fit, cultural integration, and leadership expectations to ensure a smooth transition post-acquisition. Our approach helps preserve company values while setting the stage for continued growth under new ownership.

Aligning Post-Sale Expectations for a Seamless Transition

A well-defined transition plan is essential for a successful deal. We work with both buyers and sellers to establish clear expectations around leadership roles, transition timelines, and any operational handovers. This ensures all parties are aligned, reducing disruptions and fostering a successful integration.

Partnering with Founders Advisors for a Successful MSP Transaction

Selling an MSP or IT services company is more than just a financial transaction—it’s an opportunity to realize the value of years of dedication and hard work. Founders Advisors combines deep industry expertise, a proven process, and hands-on M&A advisory services to help MSP owners navigate the complexities of a sale with confidence. We create a tailored sales process aligned with the MSP owners’ goals to produce the best possible outcome for both the owners and the business in a successful sale.

If you are considering selling your MSP business, please contact me or other members of the Technology team to learn how Founders Advisors can guide you through a bespoke sales process of your MSP or IT Services business.

During Serve Day, we assisted with various projects to help maintain and enhance the center’s facilities. From organizing donation areas, to loading trucks, to lending a hand with administrative tasks, our goal was to support the women and staff who work tirelessly to create a safe and empowering environment.

As a firm, we take great pride in investing in organizations that make a lasting impact, and The Lovelady Center’s mission of helping women rebuild their lives aligns with our commitment to serving others. We are grateful for the opportunity to contribute and look forward to continuing to support this incredible cause.

Experience in the MSP Sector

MSPs operate in a unique landscape due to factors such as recurring revenue models, high dependency on evolving technology, and its critical role in driving digital transformation for businesses across industries. When selecting an advisor, prioritize those who have specific experience working with MSPs and IT services companies. A generalist M&A advisor might excel in deal mechanics but struggle with sector-specific nuances that affect value and transaction success.

Proven Track Record and References

Past performance can be an excellent predictor of future success so it is very important to review the advisor’s track record of MSP transactions. Are they seasoned in achieving successful outcomes for MSP clients? Don’t hesitate to ask for references from past clients who can attest to the advisor’s experience, process, and results.

A proven M&A advisor for MSPs will have a list of references who can provide insights into the advisor’s approach, effectiveness in negotiation, and ability to maintain client satisfaction. A robust track record demonstrates their competence in closing deals that add value for all parties.

Understanding of MSP Business Models and Metrics

A solid advisor should not only know what MSPs do but also understand how they operate. An MSP’s business model revolves around managed services, which are typically delivered under long-term contracts. This structure often leads to predictable revenue, high customer lifetime value, and strong retention rates—all factors that can make an MSP attractive to buyers.

When evaluating potential advisors, consider whether they’re familiar with how MSP-specific metrics, such as monthly recurring revenue (MRR), annual recurring revenue (ARR), contract length, customer churn rate, product margins, drive valuation. An advisor who can communicate these metrics effectively will enhance buyer understanding and engagement, potentially increasing valuation and closing rates.

Strategic Insight and Long-Term Vision

MSPs are evolving rapidly with the demand for cybersecurity, cloud services, and AI-driven solutions. The right M&A advisor will bring strategic insights to help you understand where your business fits in the current market and how to position the company to garner maximum interest from buyers. They can identify market trends, such as an increasing appetite for cybersecurity or cloud-focused MSPs, which may inform your preparation and presentation during the sale process.

An advisor with a long-term perspective can also help you weigh whether it’s better to sell now or to continue growing in strategic areas that will yield a higher valuation in the future. This strategic insight can make a substantial difference in maximizing the outcome of your transaction.

Expertise in Valuation and Deal Structuring

Valuation is a complex process, especially in a specialized sector like MSPs, where value is often derived from customer relationships, recurring revenue, and service quality. The advisor should not only be able to provide a realistic valuation but also justify it in a way that resonates with both you and potential buyers.

Additionally, deal structuring in the MSP space may involve considerations like earn-outs, retention of key employees, and transition agreements. An advisor with experience in structuring MSP deals can craft an agreement that aligns with your goals, minimizes risk, and addresses buyer concerns. Look for an advisor who has successfully handled various deal structures, as they’ll likely be more equipped to navigate the nuances that make your MSP transaction unique.

Strong Network and Buyer Relationships

A well-connected advisor with a network of buyers interested in the MSP sector can increase your chances of receiving competitive offers. They should have relationships with private equity firms, strategic buyers, and family offices that are actively seeking MSP acquisitions.

An advisor with a wide network can reach the right potential buyers, including those who may not have considered an MSP acquisition previously. This reach is crucial because it ensures that your MSP is marketed to a diverse pool of buyers, increasing the likelihood of favorable terms and competitive offers.

Transparent Communication and Process Clarity

The M&A process can be overwhelming, especially if it’s your first time going through a sale. Choose an advisor who communicates clearly, keeps you informed throughout each stage, and explains any complexities in an accessible manner. From initial due diligence to final negotiations, transparent communication builds trust and ensures you’re fully informed.

An M&A advisor should be upfront about the sale timeline, the steps involved, and any potential challenges. A clear understanding of the process can help you manage expectations and prepare adequately for each stage.

Focus on Cultural Fit and Post-Sale Considerations

For many MSP owners, selling is not just about achieving the best valuation—it’s also about finding a buyer who aligns with the company’s culture and values. A good M&A advisor will recognize the importance of cultural fit and help identify buyers who are aligned with your vision for the business post-sale. This is particularly important if you plan to stay involved with the business or if there are key employees you want to retain.

Advisors who prioritize cultural fit will also help facilitate a smoother transition for employees and customers, preserving the company’s legacy and ensuring continuity in service quality.

Negotiation Skills and Transaction Management

The final stages of an M&A transaction often come down to negotiations. An experienced M&A advisor should possess strong negotiation skills, advocating for your interests while fostering a constructive dialogue with buyers. Look for an advisor who can demonstrate tact, perseverance, and an ability to problem-solve in real-time, as these qualities are crucial when managing complex transaction dynamics.

Additionally, effective transaction management minimizes disruptions to your business operations. A well-organized advisor will streamline the due diligence process, help you prepare essential documentation, and ensure that the transaction remains on track.

Alignment with Your Goals and Priorities

Lastly, it’s essential that your advisor fully understands and aligns with your goals for the sale. Whether your priority is maximizing financial gain, securing long-term growth for the company, or finding a buyer who respects the culture you’ve built, the right advisor should be genuinely invested in achieving these objectives.

Conclusion

Choosing an M&A advisor for your MSP can significantly impact the success of your transaction. With so much at stake, taking the time to evaluate potential advisors against these criteria will help ensure you find someone who is both technically competent and aligned with your vision for the future. An advisor who understands the unique dynamics of the MSP sector, possesses a robust network, and brings strong negotiation and strategic insight can be invaluable in achieving your goals.