MSP Valuation Multiples: What MSPs Actually Sell For

Last updated: October 5, 2026
Written by Rhett Collver, Managing Partner, C4 Solutions

Every MSP owner hears a number at a conference. Somebody’s peer got 10x. Somebody else swears the market is 4x and sliding. Both can be true, and that’s exactly why the question “what is my MSP worth” gets such useless answers.

A multiple isn’t a market rate you look up. It’s a price for risk. A buyer looks at your earnings, asks how likely they are to survive the handoff, and discounts whatever they can’t underwrite. Messy books. One giant client. A founder who still closes every deal. Each one costs turns.

That’s the lens our MSP M&A advisory team works from, and it’s the lens this guide uses too. Rhett Collver, who leads that work at C4 Solutions, built an MSP and ISP past $5 million in revenue and sold it before moving into investment banking, so he’s watched the number get set from the seller’s chair and from the other side of the table.

So here are the ranges by deal size, a rough way to estimate your own number, and the deal terms that quietly shrink what actually lands in your account.

What an MSP Valuation Multiple Actually Measures

An MSP valuation multiple is enterprise value divided by a normalized earnings figure, usually trailing twelve months of adjusted EBITDA. If a buyer values your MSP at $6 million and your adjusted EBITDA is $1 million, you sold at 6x. The multiple is shorthand for how safe and how durable a buyer thinks those earnings are.

“Adjusted” is the word doing the heavy lifting. Your tax return is built to show as little profit as possible, and a buyer wants the opposite view, so the books get normalized. The owner’s above-market salary gets reset to what a hired general manager would cost, the family member on payroll comes out, genuine one-time legal fees get added back, and the truck the company pays for gets a hard look. Every add-back has to survive diligence. Most do. Some don’t.

Smaller deals use a different yardstick. The IBBA and M&A Source Market Pulse survey prices businesses under $2 million in purchase price as a multiple of seller’s discretionary earnings (SDE), which adds the owner’s full compensation back into profit. From $2 million to $50 million, it switches to EBITDA.

That switch trips people up constantly. An SDE multiple of 3x and an EBITDA multiple of 5x can describe the exact same business. Compare your SDE against somebody else’s EBITDA multiple and you’ll feel cheated by a perfectly fair offer.

If your financials need that normalization before anyone outside the company sees them, it’s the job a fractional CFO for MSPs does ahead of a sale.

MSP Valuation Multiples by Deal Size

Size is the single biggest predictor of your multiple. By a lot. Bigger MSPs look less risky, they usually have a management layer, and more buyers can afford them. More bidders, more tension, higher price.

Aventis Advisors analyzed 624 IT services transactions from Mergermarket and estimated MSP medians for each deal size band. Deal size here means enterprise value, the total price paid, not your revenue.

Source: Mergermarket, Aventis Advisors analysis. The MSP column is Aventis’s estimate derived from the IT services data, so treat it as a band, not a quote.

Read the table the way a buyer would. An MSP with $800,000 in adjusted EBITDA selling near the small-deal median is roughly a $4 million deal, which puts it in the first row, not the third. Most owner-operated MSPs live in those first two rows. Aventis also notes the smallest shops, under about $1 million to $2 million in revenue, can drop to 3x or 4x EBITDA.

Now the figure everyone quotes. Across 120 MSP deals with disclosed multiples, Aventis found a median of about 8.9x EV/EBITDA. Sounds great. The median deal in that set was $38.5 million, a much bigger company than most owners reading this run. So be careful with it.

A second data set agrees with the small end. GF Data’s first-half 2025 numbers, which cover private equity-backed deals across industries, show $1 million to $5 million deals averaging about 5.5x trailing EBITDA, $5 million to $10 million deals at 5.6x, and $10 million to $25 million deals at 6.2x to 6.7x, so small MSPs aren’t getting some special tech premium; they’re priced a lot like any other well-run services business their size.

Public markets run hotter. They always do. Listed companies with significant MSP operations traded at a median 11.4x EV/EBITDA and 1.3x EV/revenue in the second half of 2024, per the same Aventis analysis. That’s a ceiling for context. It isn’t your comp.

Why the Same EBITDA Gets Two Different Prices

Inside any size band, the spread is wide. Really wide. Two MSPs can each earn $1.5 million in EBITDA and walk away with offers several turns apart. Aventis names the three drivers that matter most (recurring revenue, client retention, and EBITDA margins) and says buyers reward MSPs that are “efficient, predictable, and scalable.”

• Recurring revenue share. Contracted managed services revenue is the thing a buyer is actually purchasing. Projects and hardware resale get discounted, and sometimes they get valued at close to nothing.
• Retention is next. Aventis calls customer retention “a key factor in MSP valuations” and points to rates above 90% as the signal of a stable book.
• Margins tell a buyer whether you can price your own services. Service Leadership, ConnectWise’s benchmarking group, reports that best-in-class IT solution providers have posted 19% or better adjusted EBITDA for six straight years. Running at 8%? A buyer sees either a cleanup job they’ll expect you to fund through a lower multiple or a business that can’t raise prices on its own clients, and neither version of that story helps you at the table.
• What happens the week you’re gone? If the biggest client relationships and every new deal run through you, the buyer has to price in the day you stop picking up the phone.
• One client carrying a quarter of your revenue. You can guess how that conversation goes.
• Security depth helps. Aventis notes that cybersecurity firms “tend to command higher valuation multiples due to the essential nature of their services,” and an MSP with a real security practice borrows some of that.

None of this is exotic. It’s what a good operator watches anyway. Buyers don’t pay extra for polish; they pay extra for earnings they believe will still be there in three years.

Marketing belongs on that list, even though owners rarely file it there. A pipeline that depends on the founder’s network is concentration risk in a different outfit, because the day that founder steps back is the day the referrals slow down and the buyer’s growth model starts to wobble. We broke down the specific marketing fixes that raise an MSP’s exit multiple in a separate piece.

What Is My MSP Worth? A Rough Way to Estimate It

You can get within shouting distance on a napkin. It won’t replace a quality of earnings report, and a buyer will run their own math anyway. But it keeps you from anchoring on a number you overheard at a vendor event.

• Start with trailing twelve months of net income and add back interest, taxes, depreciation, and amortization. That’s raw EBITDA.
• Normalize it. Reset owner pay to market, strip personal expenses, and add back real one-time costs. Be honest here, because diligence will be.
• Find your band in the deal size table above. The band is set by the finished price, so you may have to run the math twice.
• Adjust inside the band. Strong recurring revenue, retention above 90%, and margins near that 19% benchmark pull you toward the top, while heavy project revenue, one oversized client, or a founder who does everything will pull you toward the bottom.
• Multiply, then subtract debt the buyer won’t assume. Enterprise value isn’t what hits your account.

A quick illustration with round, made-up numbers. Say your MSP books $6 million in revenue and $1.1 million in normalized EBITDA. At 5x, that’s $5.5 million. At 7x, it’s $7.7 million. Same company. That $2.2 million gap between the bottom and top of a realistic band is usually decided by the drivers in the previous section, not by anyone’s negotiating skill at the table.

Want it shorter? EBITDA sets the scale. Risk sets the multiple.

The Multiple on the LOI Isn’t the Check You Cash

Plenty of owners get surprised right here. The headline multiple describes enterprise value. What you actually receive at closing depends on how that value gets paid.

Earnouts are the big one. SRS Acquiom’s earnout research found that 24% of private-target deals outside life sciences reported an earnout in 2025, up from 19% in 2014. Across all deals with an earnout, the firm says closer to one out of five earnout dollars actually gets paid. Read that twice before you count earnout money as yours. That isn’t because buyers are crooks; earnout targets often get set on the seller’s rosiest forecast and then measured inside a new owner’s business, where pricing, staffing, and service delivery can all change after closing.

Then there’s everything else that changes the wire amount.

• The working capital peg, which gets tricky for MSPs that bill in advance and carry deferred revenue.
• Rollover equity, where you keep a slice of the combined company and take part of your price as a bet on its next sale.
• Escrow or a holdback, set aside to cover claims after closing.
• Debt payoff and transaction costs, your advisor’s fee included.

Fees vary more than most owners expect. Ask early. We laid out what MSP business brokers and sell-side advisors charge, including how monthly work fees and success fees stack up.

One practical rule. When you compare offers, compare cash at close first and the realistic value of everything else second. A 7x offer loaded with earnout can be worth less than a clean 6x.

Where the MSP M&A Market Sits in 2026

Buyers are busy. Drake Star counted 466 MSP M&A deals in 2025, carrying about $4.3 billion in aggregate deal value and up about 20% from the prior year. Its Q1 2026 update logged 121 MSP transactions, 102 of them M&A, and noted that each of the ten most active strategic consolidators bought at least five MSPs over the past two years. If you want to know how those platforms think, we covered what PE-backed MSP acquirers look for.

Prices at the top followed. Service Leadership reported in June 2026 that valuations and valuation multiples for best-in-class IT solution providers reached record highs in 2025.

Notice the qualifier. Best-in-class. A strong market lifts the well-run MSPs first and fastest. It doesn’t rescue a shop with thin margins and a founder who can’t take a week off. Buyers with capital to deploy will still pay up for an MSP with clean contracts, low churn, and margins near the top of the pack, while everyone else gets a polite offer at the bottom of their band.

Moving Your Number Before You Go to Market

Most of what sets your multiple can’t be fixed in the six months before a sale. Recurring revenue mix, retention history, margins, and a management layer that runs without you all take time to show up in numbers a buyer trusts, which is why our M&A practice plans that work on a horizon of two to four years.

Earlier than that? Good. You have options most sellers never get.

And if you want a straight read on where your MSP sits today, talk to our M&A team. We’ll look at your normalized earnings, the band you’re really in, and what would have to change to move up it.

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