September 28, 2026 – Solganick has published its latest mergers and acquisitions (M&A) report covering managed services providers (MSPs) and managed security services providers (MSSPs). It covers the latest M&A transactions year to date through Q3 2026 (Jan-Sept 2026).
You can download the full report here:
Solganick MSP Mergers Report Sept 2026
MSP and MSSP M&A Accelerates Into 2026: What Owners Should Know
If you run a managed services business, the market is sending a clear message: consolidation is in full swing, valuations remain strong, and now is a legitimate window to explore strategic options.
Our latest analysis of year-to-date M&A activity shows deal flow has not just recovered—it’s running ahead of 2025’s record pace. Here’s what’s happening, what it means for your firm, and what you should be thinking about if an exit is on the horizon.
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The Numbers Don’t Lie
Consolidation accelerated sharply in early 2026. Global MSP acquisitions jumped 73% year-over-year in Q1 alone, with 64 publicly announced deals compared to 37 in the same quarter a year prior. North American volume rose 28% to 37 deals. By mid-year, transaction velocity had settled into a sustainable rhythm: 111 MSP transactions in Q2, with IT services comprising 95% of deal volume.
This isn’t a blip. Over the full year 2025, the market closed 466 MSP and MSSP transactions valued at $4.3 billion—a 20% increase over 2024. And 2026 is tracking ahead of that pace in every quarter reported to date.
Three dynamics sustain the cycle:
1. Private equity has never been better capitalized. Near-record dry powder from sponsors looking to deploy capital is driving competition for quality targets.
2. Platform builders are hungry for add-ons. Sponsors who formed MSP and MSSP platforms in 2019 to 2021 are now two to four years into their fund lives—the sweet spot for accelerated acquisitions.
3. Founder populations are aging into exit conversations. Many bootstrapped MSP owners founded their businesses 15 to 20 years ago. Retirement planning and generational wealth considerations are real motivators.
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What’s Your Business Worth?
For MSP owners, valuation multiples remain robust—and the range tells you exactly where your operational maturity matters most.
Median EV/EBITDA across 120 analyzed MSP transactions sits at 8.9x, with the range reflecting business quality:
– Sub-scale operators (under $1M EBITDA): 6.0x – 7.0x
– SMB MSPs ($1M – $3M EBITDA): 6.0x – 9.0x
– Mid-market MSPs (above $3M EBITDA): 7.5x – 12.0x
– Platform-scale with 80%+ MRR and cyber practice: 10.0x – 14.0x
– Platform-tier transactions (above $500M EV): 14.0x – 20.0x
The message is clear: buyers reward operational maturity, predictability, and delivered security capability. Three things move you between valuation bands:
What adds value:
– +1.5x to 2.5x turns for an integrated MDR practice with SOC 2 Type II certification and ISO 27001 compliance
– +1.0x for weighted-average contract length above 24 months
What reduces value:
– −1.0x to 2.0x if your top ten customers represent more than 40% of MRR
– −1.0x to 3.0x if annual churn exceeds 10% or your revenue mix is heavy on projects
This year, 57% of failed transactions cited valuation expectations as the reason they fell apart—up sharply from 28% in 2025. That said, well-run sub-$2M EBITDA MSPs still clear 10x multiples when they run a competitive process and have multiple qualified buyers at the table.
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The Security Attach Story
Here’s where the market is sending its strongest signal: security is no longer a nice-to-have. It’s becoming table stakes.
Buyers are paying a significant premium for MSPs with delivered managed security capability. An integrated MDR practice, documented SOC playbooks, SOC 2 Type II attestation, and ISO 27001 certification can add 1.5x to 2.5x turns to your EBITDA multiple—the difference between an 8x valuation and a 12x valuation on the same revenue base.
But here’s the catch: buyers don’t buy positioning. They buy evidence. In diligence, they’re underwriting:
– Recurring security revenue separated from resale
– Attach rate by customer cohort
– Documented incident history and SOC operating procedures
– Your ability to deliver managed security without just reselling a vendor’s platform
If your “security practice” is primarily reselling Sophos or CrowdStrike licenses, the premium doesn’t apply. If you operate a genuine MDR practice with your own tier-one SOC staffing and incident response playbooks, you’ll see buyers moving from 8x to 9x or 10x during the negotiation.
The Gartner forecast for 2026 is instructive: worldwide information security spending is projected to grow 15.1% to $268 billion. Buyers are paying a premium because they’re buying into that growth, and they want operators who can deliver it.
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The Buyer Landscape Has Broadened
Gone are the days when your only exit was to a financial sponsor. Today’s buyer set has expanded into three distinct categories:
Financial Sponsors. PE firms continue to dominate the market, representing 69% of disclosed MSP transactions in 2025 and half of Q1 2026 MSSP deals. Platforms two to four years into fund life—think Evergreen, Lyra, The 20 MSP, Thrive, Ntiva, and Dataprise—are the most reliable bidders at the $1M to $10M EBITDA band.
Strategic Acquirers. Consulting firms and security vendors are buying delivered capability rather than building it. Booz Allen buying cyber consulting firms. Check Point acquiring MSP platforms. Arctic Wolf adding attack surface management. These buyers often move faster and have different integration expectations than platforms.
Strategic Aggregators. Distributors, telecom operators, and technology vendors are acquiring MSPs to control last-mile delivery to SMB clients. This is the newest and fastest-growing buyer category, and it’s expected to accelerate through 2028.
Outside investors participated in 80% of MSP and MSSP transactions in Q1 2026, up from 68% a year earlier. That tells you the market has shifted decisively toward structured deals with financial and strategic sponsors.
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What About Managed Security Services Providers?
MSSP deal activity tells a different but equally bullish story. Cybersecurity M&A recorded 209 transactions in the first half of 2026, effectively level with the prior-year period. But within that flat headline, managed security has taken a larger share.
Buyers are acquiring delivered capability rather than building it. The volume breaks into three patterns:
1. Platform vendors adding managed services. Security software companies building out services to deepen customer relationships and recurring revenue.
2. MDR providers consolidating for scale. Managed detection and response specialists combining to build regional or national platforms.
3. Sponsors assembling regional security platforms. Financial sponsors building MSP and MSSP platforms with built-in security depth from day one.
MSSP Valuation Multiples run higher than generalist MSPs because security revenue commands a premium:
– Security consultancies (under $1M revenue): 3x – 5x SDE
– Generalist MSPs ($3M – $10M revenue): 5x – 8x EBITDA
– Security-led peers ($3M – $10M revenue): 8x – 11x EBITDA
– Security-native MSSPs with SOC 2 Type II: 9x – 12x EBITDA
– Scaled MDR platforms: 2.3x – 2.6x revenue
A credible managed security practice adds 2 to 4 turns of adjusted EBITDA over a generalist MSP of the same size. The gap widens at scale.
One note: regulatory pressure is pulling governance, risk, and compliance advisory firms into the same buyer set. When compliance work converts into recurring managed revenue, it becomes an acquisition target. The consolidation trend is broader than pure security.
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What Happens Next?
Our outlook for 2027 points to four trends worth tracking:
1. Volume stays elevated, then plateaus. The 15 to 20 best-capitalized platforms will continue acquiring aggressively. But the population of founder-owned, sponsor-naive MSPs at scale declines each year. Eventually, the number of available targets shrinks, and deal flow normalizes.
2. First-wave platforms reach exit. Sponsors who formed platforms in 2019 to 2021 approach the end of their hold periods. Expect a wave of large sponsor-to-sponsor transactions (platforms selling to larger platforms or other sponsors), which could drive up headline multiples but reduce the number of direct founder exits.
3. Security becomes table stakes, not a premium.** As security attach spreads across the MSP base, the valuation premium concentrates on operators that can evidence delivery—own SOC, documented playbooks, third-party attestation. Generic “we sell security” messaging will see valuations compress.
4. AI service delivery enters underwriting. Buyers are pricing automation of tier-one support as future margin improvement. MSP models that require headcount growth to scale are being repriced against those that don’t. Automation and AI-assisted service delivery will become a valuation factor, not just a cost-control tactic.
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If You’re Thinking About an Exit
The market is favoring your side right now. Valuations remain strong. The buyer pool is broad and well-capitalized. And if your business has recurring revenue, operational maturity, and real security delivery, you’re in a competitive auction scenario—which means multiple buyers and upward valuation pressure.
Here’s what we’re seeing from owners who move successfully:
– Run a formal process, not a one-off approach. Competitive tension between qualified buyers drives valuation up by 15% to 30% in the range we’re seeing.
– Get your house in order before you market. Customer concentration, project revenue, owner dependency, and churn above 10% all show up in diligence and reprice the deal. Fix them first if you can.
– Separate real security revenue from resale. If you operate an MDR practice or SOC, prove it. Buyers are underwriting deliverables, not positioning.
– Understand your multiple. Know whether you’re targeting a financial sponsor (platform builder), a strategic acquirer, or an aggregator. Each has different timelines, integration expectations, and valuation frameworks.
– Think beyond the number. Earnouts, seller notes, and retention agreements are all negotiable. The headline multiple matters, but so does certainty of close and the size of the downside risk you retain.
57% of transactions that failed this year did so because of valuation mismatches. Most of those mismatches came from sellers underestimating where the market had moved or overestimating the attractiveness of their particular business. Don’t be that seller.
If you’re running an MSP or MSSP and you want to understand where your business sits in this market—what it’s worth, what you should be doing to optimize its profile, or what the process looks like—we’re here to talk.
We’ve completed 200+ transactions to date and manage $20 billion in deal value across software and technology services. We work exclusively with founder-led and sponsor-backed companies in managed services and managed security.
A conversation about positioning, timing, or valuation costs nothing. A wrong decision or missed window costs everything.
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Solganick & Co. is a technology services investment bank focused exclusively on the software and IT services sectors. This analysis draws on Omdia deal data, SEC filings, press releases, and proprietary transaction research from 2024 through Q3 2026.