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Thinking Of Buying Or Selling An MSP? Here Are 6 Tips From Experts

A lot of factors are involved in determining if and when an MSP should engage in a merger or acquisition deal. And now, at a time when the MSP M&A space is red-hot, it is more important than ever to understand a company’s value, its cultural fit, and how different buyers including private equity firms approach the deal, according to a panel of experienced MSP M&A professionals.

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Prepping To Buy Or Sell In A Red-Hot MSP M&A Environment 

The MSP business environment is currently going through an intense round of consolidation as MSPs large and small are being purchased either by their larger peers or by private equity firms.

Why MSPs are being pursued is easy to understand. MSPs with a good base of happy customers and recurring revenue represent an investment that can be hard to pass up.

However, everything else about MSP M&A is not so easy. Going through a merger or acquisition means answering a lot of hard questions, including how to value the business, what is the culture fit, and what plans the buyer has for the seller. The latter question becomes especially important when the buyer is a private equity company who may either look to invest in growth or quickly grab profits.

At The Channel Company’s NexGen+ 2021 Conference, these questions and more were answered by a panel of MSP executives and investors, all of whom have years of experience in the MSP M&A process, both on the buyer side and the seller side. The insight they provided is invaluable to MSPs looking for an exit or a growth spurt.

The panelists included Rocco Musumeche, founder of Exit Maximizer, a San Francisco-based company which helps solution providers increase the value of their companies in preparation for potential sales of those companies; Nathan Phinney, the director of business development at Datapath, an Irvine, Calif.-based solution provider; Linda Rose is founder, CEO, and president of RoseBiz, an Encinitas, Calif.-based boutique technology M&A advisory firm that focuses specifically on technology service providers looking to sell their businesses; and George Sierchio, executive vice president and senior partner at Cogent Growth Partners, an Atlanta-based buy-side focused merger and acquisition advisory firm that works exclusively with clients and candidates in the IT services industry.

For their insight, click through our slideshow.

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