Solganick & Co. November 2021 M&A Update - IT Services and MSP's

November 2021 M&A Flash Report – IT Services and MSP’s

M&A Summary

  • Deal activity has been strong in 2021 for IT services providers (e.g., companies providing managed IT services, systems integration, IT consulting, and other related services).
  • Valuation multiples are expanding, driven by an increasing market demand for quality companies.
  • Several private equity backed platform companies have helped drive up valuations and overall demand in an attempt to become market leaders.
  • Scarcity of “quality” assets is driving intense competition among both financial and strategic acquirers.
  • Expecting 2022 to continue strong deal volume and high valuations for buy vs build M&A strategies.

Valuation Drivers

Meaningful recurring revenues (ideally >50%)

Demonstrated top-line growth and history of profitability (gross profit and EBITDA margin)

Returning and recurring client relationships

Focus on industry sector(s) and/or technology expertise (data analytics, SAP, Oracle, MSFT, Snowflake, cybersecurity)

Low levels of customer concentration

Seasoned senior management, subject matter experts and sales team

M&A Transactions Announced (Selected), November 2021 – IT Services and MSP’s

 

Announced Date

Target

Acquirer

Focus

November 2021

EightCloud

Navisite

Salesforce, Cloud, IT Consulting

November 2021

Standav

Brillio

Salesforce, Cloud, IT Consulting

November 2021

ClearEdge Partners

Accenture

IT Spend Management

November 2021

CCG Analytics

3Cloud

Data Analytics Consulting, MSFT Azure

November 2021

Skybridge Global

Datavail

Oracle Systems Integrator

November 2021

Halski Systems

Logically

MSP

November 2021

Echo Technology Solutions

Abacus Group

Financial services focused MSP

November 2021

Wrightcore

Converge One

MSP and technology solutions provider

November 2021

Avata

Rockwell Automation

Oracle Systems Integrator

November 2021

Cognicase Management Consulting

CGI

IT Consulting

November 2021

On Time Tech

Valeo Networks

MSP, MSSP

For more information or to download the full M&A report please go here: https://solganick.com/wp-content/uploads/2021/12/IT-Services-and-MSP-MnA-Flash-November-2021.pdf

 

Solganick & Co. is a data-driven investment bank and M&A advisory firm focused exclusively on the software and IT services sectors. For more information, please contact us.