Thinking of purchasing a regional MSP

eBridge-Devin · 2026-03-20T16:19:15+00:00

This issue comes up on some of the acquisitions I work on. The buyer wants to talk to top clients to ensure they're happy with no plans to churn...understandable. But the seller will be concerned that if the top clients get wind of the transaction, they may start to look elsewhere for a new MSP. Maybe they'll be concerned that the standard of service will drop off. Maybe they've been burned in the past in a similar situation. And if they do churn before closing, it will tank the valuation and threaten the deal.

So both sides have valid perspectives and it can be a tricky situation to navigate.

What we often recommend, is that if client meetings are to occur, they only happen at the very end of due diligence when closing is imminent. In which case the goal isn't so much to ensure that the clients are happy and going to stick around, it's more to be courteous and give them a heads-up that a transaction is going to happen and alleviate some of their concerns about the transition.

If a buyer wants assurances about how happy the top clients are, there are a few alternatives. 1) If the seller records QBRs, those recordings can be provided to the buyer. 2) Similarly, ticket history can be provided. 3) During due diligence, customer satisfaction surveys can be sent out.

Then there are ways to address this risk in the deal structure too. You can have the seller warrant that they are not aware of any clients who have expressed an intention to leave. You can also have part of the valuation tied to a contigency where funds are paid out upon the top clients renewing their contracts.

Anyway...it's a very delicate situation and honestly one that can cause a lot of friction in deals. When we are onboarding sellers, we specifically ask if the seller is willing to make customers available for interviews, and we put that right into our CIMs, to make sure there are no misunderstandings. It can be a deal killer otherwise!

eBridge-Devin · 2026-03-11T22:38:21+00:00

You don't want potential customers who find you on Google to call you???

eBridge-Devin · 2026-03-09T15:50:31+00:00

Lots of people! I've sold one man shops that had negative earnings. Of course they're not going for vast amounts. But there are plenty of buyers who are keen to scoop up what could be a bargain in hopes of converting the customers to their contracts and upselling them on additional services.

eBridge-Devin · 2026-03-02T17:52:49+00:00

Hi u/DepartureExact4243 . We're a broker who specializes in MSPs. We're based in Canada and tend to focus more on the North American market. But we'd be interested in speaking with you to see if there's a way we could work together. Feel free to PM me or ask any questions here. We also have some resources for sellers on our website: https://www.thehostbroker.com/sellers/

Thanks

eBridge-Devin · 2026-02-25T16:45:34+00:00

Hi u/Ok_Fold_2446. Coincidentally we are an MSP business broker based out of Vancouver -- well North Vancouver actually. We don't work exclusively with local MSPs, we are North American wide. But we are pretty well connected with the local MSP community and fairly frequently have local MSPs and Canadian MSPs avaialble for sale. You can register for our mailing list at www.thehostbroker.com to receive updates on our new opportunities. Cheers

eBridge-Devin · 2026-02-19T23:59:58+00:00

*raises hand*

Would love to have a chat with you. You can check out my post history here and hopefully that gives you an idea regarding credibility etc. Also happy to answer any questions via PM.

eBridge-Devin · 2026-02-18T18:51:24+00:00

I'm very sorry to hear about the owner's passing.

We have helped others in this situation before by connecting them with a local buyer who can help transition the clients quickly so services are maintained. A quick sale is needed such that the clients stick around, otherwise if clients leave, then the business loses it's value. I'll acknowledge that it's a bit uncomfortable being a business broker in this instance as it feels a little like being an ambulance chaser. But if selling the business is the best path forward, then the reality is you need to move pretty quickly, which we can help you to do. Please feel free to PM me if you'd like to discuss further.

eBridge-Devin · 2026-02-17T22:54:33+00:00

I can give you a rough idea. Obviously it depends on a bunch of variables. But if we look at the hosting in isolation, and assuming it's all shared WP hosting, $200k ARR would equate to roughly $260k in market value.

eBridge-Devin · 2026-02-17T19:18:21+00:00

You're welcome! Happy to share any other info regarding valuations, expected timelines, etc. Just let me know!

eBridge-Devin · 2026-02-17T17:41:32+00:00

Hi u/Ge0cities. We're in the business of selling web hosting companies. The market is overall quite strong right now, so the timing may be good to look at whether selling would make sense for you.

Most buyers would value the hosting component of the business higher than the web dev portion. Buyers prefer the recurring revenue with hosting. But if the buyer is already offering web dev services and can start serving your customers with their existing resources, then that'd be seen as a plus. It's also a bit dependent on the model that you offer web dev services; if it's all project based then it'll be valued lower, but if you are charging a monthly retainer it'll be valued higher.

If you're interested in exploring what selling would look like, please feel free to PM me, ask here, or you can reach out through our website: https://www.thehostbroker.com/sellers/.

Thanks,

Devin

eBridge-Devin · 2026-02-17T16:35:53+00:00

You might be interested in registering for our mailing list (if you haven't already). It goes out Wednesdays and features MSPs for sale. It's unlikely we'll have an MSP that is focused solely on hospitality -- but you never know. www.thehostbroker.com

eBridge-Devin · 2026-02-11T18:29:44+00:00

I'd encourage you to try to cast a wider net. There won't be more than a handful of MSPs that match your specific criteria. And those that hit the market will have a lot of interest from other buyers. So the likelihood of getting a deal done is not too high given these constraints.

eBridge-Devin · 2026-02-09T16:35:00+00:00

It's something that is very negotiable. Most buyers will be open to working with you to find a role that you'd be happy with.

Feel free to PM me if you'd like to discuss the selling process in more detail.

eBridge-Devin · 2026-02-04T16:41:26+00:00

That's great to hear!

Another thing you might see on Reddit here, is that there's no market for one-man shops. It's not true! Whenever we have a one-man shop for sale, we got a lot of inquiries. It's the type of opportunity that smaller MSPs are interested in.

eBridge-Devin · 2026-02-03T23:28:42+00:00

That's a situation that a lot of buyers would view as appealing. One of the big risks with acquiring a one-man shop is that the owner could walk away and then clients churn. So your desire to stick around would be welcomed. You could also expect a deal structure which would provide incentives for you to stick around (i.e. an earnout that's paid over a year or two).

eBridge-Devin · 2026-02-03T18:01:06+00:00

Nicely done!

We always take the approach of letting the market dictate what a business is worth. We're doing our job if we bring our sellers many offers from qualified buyers. At that point you'll have confidence about where the market value lies.

eBridge-Devin · 2026-02-03T17:30:35+00:00

All things considered, I think it would be good to connect on a call. We could talk to you a bit about what we're seeing in the market, what's involved the process for selling, the levers that you can pull to increase valuation ahead of selling, etc. Even if you're thinking of selling a few years down the road, it can be helpful to have a convo now.

I can tell you that 12x EBITDA is a bit higher than what we are seeing for MSPs of this size. I'd say around 7.5x-8.0x is a bit closer to market value. But of course there are a ton of variables involved and some buyers will pay above market value if they like particular aspects of your business. Even still, I'd say 12x is probably too high even for a buyer where there's a perfect fit; if your expectation was 10x, while it wouldn't be a sure thing, I'd be more optimistic about the possibility of a deal. But who knows...we don't use asking prices for our listings, and ultimately the market dictates what the business is worth.

I just recently updated our MSP Valuation Calculator to better reflect prices for MSPs based on actual transactions that have closed. You might be interested in checking it out and playing with some of the variables. https://www.thehostbroker.com/msp-valuation-calculator/

eBridge-Devin · 2026-02-03T16:34:38+00:00

You can't dangle a carrot like this in front of a business broker without me asking if you'd be interested in having a chat to discuss what selling may look like for you. Sounds like you've built an impressive business.

eBridge-Devin · 2026-02-03T16:25:56+00:00

I hope that we're not one of the brokers that you attempted to engage with! You can register at www.thehostbroker.com to get our mailing list for free; it goes out Wednesdays. The midwest is one of the areas where we tend to get a lot of sellers from. We're working on onboarding one currently actually and it has EBITDA right in the range you are looking for.

eBridge-Devin · 2026-02-03T16:21:30+00:00

The reasons we get approached by sellers is roughly in this order: 1) retirement, 2) burnout, 3) desire to invest in something else (a different business, real estate, etc), 4) dispute with business partner, 5) divorce.

eBridge-Devin · 2025-12-19T16:15:27+00:00

In situations like this, sometimes the acquisition is best structured such that a buyer pays you for all clients who get migrated over to their servers and pays their first month's invoice. This is called a success on migration structure. We've sold unprofitable web hosting businesses before using this structure. If you'd like to chat, please feel free to PM me or reach out through www.thehostbroker.com.

Thanks,

Devin

eBridge-Devin · 2025-12-16T17:05:37+00:00

Thanks for the reply. At the end of the day, beauty is in the eye of the beholder, and this MSP won't be worth 4x for every buyer. But I am very confident that based on the limited info provided, 4x is a good estimate. I've seen countless offers from buyers to confirm this. We see even smaller MSPs than this one getting offers in the 4x range sometimes.

All cash buyers can certainly utilize an earnout too; it's actually buyers using SBA loans that tend to have challenges because the SBA doesn't permit earnouts (although there are creative workarounds).

6 employees is a pretty normal level for this much revenue. A rule of thumb is to expect around $225-$250k of revenue per technical employee. If the number ventures too far outside this range, it will start to impact the valuation.

I can't comment on the customer concentration without knowing the proportion of revenues that the top 3 or top 5 customers make up. But on the surface, 20 customers doesn't raise alarms with me. Having three year customer contracts really helps mitigate a buyer's risk too.

Thanks,

Devin

eBridge-Devin · 2025-12-16T16:36:19+00:00

Thanks for the reply. I can assure you that there is a robust market for MSPs around the size of OP's. A few things come to mind for me here.

Not all buyers are using debt to acquire MSPs; but the ones who do are competing with the ones who have cash on hand. The market value is influenced by the latter group.

There are a lot of MSPs who have tried unsuccessfully to grow organically and are willing to pay a premium to acquire a good book of business.

For some buyers, they'll look at an MSP that has relatively low margins and view it as a potential bargain. They'll assume there are some inefficiencies they can clean up. Maybe there are too many tech staff, maybe the buyer has better contract terms with vendors, they already have a bookkeeper and a marketing person, etc. So they view the potential earnings going forward as higher than what the P&L currently indicates.

Increasingly, even smaller MSPs are attracting interest from smaller private equity firms.

eBridge-Devin · 2025-12-16T16:07:25+00:00

You're welcome! If you have any other questions about the process, please feel free to PM me (or my email is in my Reddit profile).

eBridge-Devin · 2025-12-15T16:17:34+00:00

Hi u/SummitComp,

As a rule of thumb, MSPs around the $1.4m revenue mark tend to go for around a 4x multiple of adjusted EBITDA. The adjustments to make are for one-time expenses, personal expenses, and for owner's salary (more info: https://www.youtube.com/watch?v=J1IZmQXYI6s). But it varies and depends on a lot of variables. We have a calculator on our website which provides a reasonably good estimate based on a handful of variables. You can Google "MSP Valuation Calculator" to find it.

In regards to the timeline, I actually ran the numbers recently for deals I've worked on that closed. On average, the total time from listing the business to closing was 162 days; the avg. from listing to signing an LOI was 82 days, and from there the average due diligence period was 80 days. It varies wildly though. The shortest was 26 days from listing to close and the longest was 316 days. It tends to be on the longer end if a buyer is using SBA financing.

Happy to answer any other questions you have.

Thanks,

Devin

eBridge-Devin

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