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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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2. Determine When Ready To Make A Deal 

According to the panelists, every MSP has its own reason for pursuing an M&A deal, particularly when it comes to being acquired.

Phinney said his company was started with the idea that the founders would run it for 10 years and then sell. And while the time to sell fell squarely during the COVID-19 pandemic in 2020, the founders followed through on their exit strategy.

“It’s important to know what your exit strategy is, even if it’s to die at your desk,” he said. ”But if you haven’t started thinking about that, that would be the most important thing that you can take away from here. There’s other opportunities out there, and it’s not in everyone’s blood to stay in the same [company].

Rose said she decided to sell her last company while in her mid-50s as a way to finally have time for other activities.

“All that stuff that I wanted to do but I didn’t because I was running a seven-by-twenty-four business,” she said. ”I was just ready to do that. You have to just know in your gut it’s your time. Go with your gut.”

When looking to make an acquisition, long before looking for the money, it’s important to be clear on why and MSP wants to make an acquisition, Sierchio said.

“[You have to be] very comfortable in your own skin because you’re going to add another company to what you’re doing,” he said. ”And that’s also not the easiest thing in the world.... There’s a lot of factors that go into making sure you’re buying the right thing that’s going to get you to where you want to go at the time without actually destroying two companies in one fell swoop.”

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