The MSP Market has been undergoing a wave of consolidation. Large service providers have been acquiring smaller firms and a number of MSPs have merged. In the first five weeks of 2020 there have already been 66 M&A transactions among MSPs, VARs, and IT Services firms globally.
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If we look at the M&A Deal Trend across the broader market of MSPs, VARs, and IT Services companies, the last few years have shown a steady number of transactions each year :
This activity has prompted many shareholders to evaluate whether the timing may be right to explore their options now before any potential downturn in the economy.
The MSP market is very fragmented, offering an opportunity for acquirers to scoop up smaller MSPs that are strategic to their plan, and for sellers, who can take advantage of this competitive market. There are more buyers than good quality companies interested in selling, there is ample access to cash, and many MSPs are using acquisitions to help bridge technology gaps, increase their service offerings, gain entrance to new vertical markets, and accelerate organic growth. These are optimal market conditions for shareholders who feel the timing is right for them to explore a sale.
The MSP market is growing – it is expected to reach USD $356.24 billion by 2025, registering a CAGR of 11.5% during the forecast period of 2020-2025. Within the broader market of MSP offerings, Cybersecurity is an area that is growing faster than others in this space. Firms with a strong cybersecurity offering will be sought after by buyers who are looking to add the necessary infrastructure to deal with the increase in cyberthreats.
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