Blog by Ben Greenberg, VP of Corporate Development at IT Solutions
If you’re considering exiting your business or are navigating the challenges of growing your MSP, we invite you to connect with Ben.
The Managed Service Provider (MSP) industry continues to see heavy M&A activity on both the sell and buy side. I’ve noticed a few interesting developments in the first half of 2025, across three key themes: seller behavior, valuation trends, and integration strategies.
One of the most notable trends observed this year has been the increasing sophistication of sellers in the MSP space. For educated sellers, the days of casting a wide or random net for the sole purpose of trying to maximize a valuation are gone. Sellers are becoming far more knowledgeable about the “types” of buyers in the market. This strategic approach allows sellers to focus their energy on engaging with buyers who align with their culture, exit plan, and organizational and financial goals. This does not mean valuations are going down; in fact, it is quite the opposite, as buyers are becoming more strategic as well in isolating key acquisition candidates and are typically willing to pay premiums for solid matches.
While MSP valuations, on average, seem to be holding steady, a key trend that began last year has continued to intensify: the divergence between strong assets and less strong assets. High-quality MSPs with good organic growth, scalable operations, and strong client dynamics are commanding premium valuations, while weaker assets appear to be struggling to maintain their footing in the market.
For MSPs looking to sell who have not historically hit the mark on operational metrics, it could still be a good idea to talk to potential buyers. They often will give advice on how to improve operations to a point where valuation becomes more attractive for a seller. At ITS, at any given time, we work with several MSPs to improve their key value drivers and help them build valuation, even if it’s for a planned exit 12 – 24+ months down the line.
Integration, historically a debated aspect of platform growth, is emerging as a focal point for MSP platforms that historically downplayed its significance. Over the past few years, some platforms favored a “stand-alone” approach, preferring to maintain independent operations across their acquisitions. However, in the first half of 2025, we’ve seen a noticeable shift in this narrative as more platforms begin to appreciate the value of combining operations.
While full-scale integration remains daunting, platforms are taking incremental steps toward alignment. Whether merging back-office functions, standardizing processes, or fostering cross-team collaboration, the industry is recognizing that integration is where the most employee and client value lies.
For us, integration has been a cornerstone of our strategy from day one. We’ve spent years refining best practices, learning from challenges, and adapting to the unique dynamics of each acquisition. While we take pride in the progress we’ve made, we also acknowledge that integration is always a continuous journey with room for growth.
We expect the MSP space to continue showing strong activity in the second half of 2025. M&A remains one of the hottest topics in peer groups, industry events, and social media, and it assists in educating smaller MSPs. In addition, several platforms will most likely look to trade in the second half of the year as they continue to build value under new ownership.
Unlocking growth through M&A presents unique opportunities and challenges. Whether you’re planning your next acquisition or considering selling your business, we’re here to help your MSP thrive.
We’ve got answers — fast, clear, and tailored to your needs. Let’s talk tech.
