The MSP Consolidation Wave: 466 Deals in 2025 and What Comes Next

The managed services market saw 466 M&A transactions close in 2025, totaling $4.3 billion in deal value, a roughly 20% jump in volume over the prior year. Private equity firms drove more than 40% of those deals. The consolidation wave isn't coming. It's here, it's accelerating, and it's reshaping who survives as an independent MSP and who becomes a tuck-in.

By Gui Carlos, CFA — Principal at Walden Mergers & Acquisitions

Last updated: February 2026

How big is the MSP M&A market in 2026?

The U.S. MSP and MSSP market represents roughly $106 billion in total addressable market, and deal activity is running at the highest sustained pace the industry has ever seen. North American IT services M&A hit 122 transactions in Q2 2025 alone, up from historical quarterly averages of 84 in 2018 and 96 in 2019.

What's different about this cycle is the buyer profile. Two years ago, most MSP acquisitions were local: a larger regional MSP buying a smaller neighbor for client density. That still happens, but the center of gravity has shifted to PE-backed platform plays running national and international rollup strategies. The 466 deals in 2025 included dozens of repeat acquirers doing three, five, ten deals in a single year.

The total addressable market number matters because PE firms use it to size their opportunity. A $106B market with thousands of fragmented sub-$10M EBITDA operators is the exact profile that attracts rollup capital. And there's a lot of that capital looking for a home: over $400 billion in PE dry powder earmarked for technology services as of late 2025.

Who are the biggest acquirers of MSPs right now?

A handful of platforms are responsible for a disproportionate share of deal volume. Here are the most active:

Evergreen's numbers are worth sitting with. Alpine Investors closed a record 190 deals across all its platform companies in 2025. Evergreen, its IT services arm, accounted for 47 of those, including REDD, its 10th acquisition in Australia and 100th MSP acquisition since the platform launched. That's not a company testing a thesis. That's a machine.

The 20 MSP Group, based in Plano, Texas and led by founder Tim Conkle, takes a different approach. They acquire MSPs from within their own membership consortium, operators who already run on The 20's standardized RMM, PSA, and documentation stack with a U.S.-based help desk and NOC.

What I find interesting is the divergence in integration philosophy. Evergreen runs a decentralized model: companies keep their names, leadership, and local brands. New Charter does something similar with equity partnerships. The 20, by contrast, standardizes everything onto its own platform. Both approaches work, but they produce very different experiences for the selling owner, something I always make sure clients think through before signing an LOI.

What's driving so many MSP acquisitions?

Three forces keep compounding on each other.

Compliance mandates are creating forced demand. CMMC 2.0 requirements for defense contractors, tightened HIPAA enforcement, state-level data privacy laws multiplying each year, and the EU's NIS2 directive going into enforcement. All of this has turned compliance from an upsell into a prerequisite. SMBs that used to ignore their MSP's security recommendations now face regulatory consequences if they don't act. But only 36% of MSPs currently offer formal compliance services. PE firms have figured out that acquiring MSPs with compliance capabilities, or buying commodity MSPs and bolting on compliance, is one of the fastest ways to capture this demand. Compliance isn't a feature. In the current M&A market, it's the acquisition trigger.

The vendor layer is consolidating too, and that trickles down. Kaseya brought in new CEO Rania Succar in mid-2025 (she came from Intuit, where she ran QuickBooks Money and Mailchimp) and is now serving nearly 50,000 MSPs globally while openly discussing a potential IPO. Thoma Bravo sits behind both ConnectWise and holds a roughly one-third stake in N-able, which has been exploring a sale since 2024. NinjaOne hit a $5 billion valuation after acquiring Dropsuite for $270 million. When the tools you build your business on are themselves getting rolled up and repositioned, the downstream effect on MSP operations and economics is real. Consolidation at the vendor layer puts pressure on MSP margins, which in turn makes scale (through acquisition) more attractive.

PE math loves recurring revenue. An MSP with 75%+ monthly recurring revenue, low churn, and a clean PSA producing accurate financials is one of the most attractive acquisition targets in all of lower middle-market M&A. The predictability of the cash flows lets PE firms use debt financing efficiently, the fragmentation of the market means there's always another tuck-in available, and the switch from break-fix to managed services is still only about 60% complete across the SMB market. That's a long runway. The $400B+ in dry powder isn't going to sit idle when the math works this well.

How are MSP valuations changing?

The headline number: the median EBITDA multiple for premium MSP platforms hit 11.4x in 2025, up from roughly 9x two years prior. But that median obscures a story that matters more. The gap between the top and the bottom is widening.

I wrote about this in my valuation guide: there's a 55% valuation bifurcation between commodity MSPs and converged MSP/MSSP platforms. That gap grew in 2025 and shows no signs of closing.

Here's what's happening at each end:

At the top, platforms with SOC and NOC operations, compliance services, $3M+ EBITDA, and 80%+ recurring revenue are seeing competitive processes with multiple bidders. Some are closing at 12–16x. PE firms are paying these multiples because they're buying platforms they can bolt additional acquisitions onto. They're not just buying cash flow, they're buying infrastructure.

At the bottom, sub-$1M EBITDA MSPs running basic RMM/PSA without security services are finding fewer buyers and lower offers. The 4–6x range still holds, but the buyer pool has thinned. Strategic acquirers who used to pay 5–7x for client lists are now more selective because they've been burned by integration headaches.

In the middle, something interesting is happening. MSPs in the $1M–$3M EBITDA range with genuine security capabilities are becoming the most sought-after tuck-in targets. They're big enough to matter, small enough to absorb quickly, and if they have the right service mix, they command 7–10x in the right process. This is the sweet spot where a well-run sell-side process with competitive tension can add 2–3x turns of EBITDA to the outcome.

What does this mean if I haven't sold my MSP yet?

You're not too late. But the window for maximum negotiating power is narrowing.

Here's my read on where this market goes over the next 12 to 24 months:

Deal volume will stay elevated but shift toward quality. The 466-deal pace of 2025 may not repeat in raw numbers. Capital is flowing toward platforms that combine scale with execution, not just deal count. That means the acquirers getting pickier about what they buy, which is better news for well-prepared sellers and worse news for anyone hoping to ride the wave without doing the work.

Integration is becoming the differentiator. For years, some PE-backed platforms took a "buy and ignore" approach: acquire MSPs, keep them independent, don't integrate. That narrative shifted in 2025. I'm seeing more platforms invest in combining back-office operations, standardizing tooling, and pushing for operational alignment across their portfolios. Platforms that can demonstrate real integration synergies will attract higher exit multiples from the next wave of buyers, and they're paying for tuck-ins that make integration easier.

Compliance-first MSPs will command the best premiums. If you can walk into a diligence meeting with SOC 2 Type II, a documented compliance framework (especially around CMMC 2.0 or HIPAA), and a track record of selling managed compliance services, you're in a completely different negotiation than the MSP down the road who bolted "compliance" onto their website last quarter.

Owner-operators have a decision to make. The PE-backed platforms are scaling fast. Every MSP they acquire is one fewer competitor and one more reason for the next acquisition target to take the call. If you're a $2M–$5M EBITDA MSP who wants to sell in the next three years, the preparation work starts now, not after someone calls you with an unsolicited offer. The 12-month exit readiness process I walk clients through exists because the MSPs who prepare get materially better outcomes than the ones who react.

Key takeaways

• The MSP M&A market hit 466 deals and $4.3 billion in 2025, a ~20% increase in volume, driven primarily by PE-backed platform consolidators like Evergreen Services Group (100+ acquisitions since inception) and The 20 MSP Group (44 deals in three years)
• Compliance mandates (CMMC 2.0, HIPAA, NIS2, state data privacy laws) have become the primary acquisition trigger, yet only 36% of MSPs offer formal compliance services
• Premium MSP platforms now trade at 11.4x median EBITDA (up from ~9x two years ago), while commodity MSPs remain stuck in the 4–6x range, creating a 55% valuation gap that keeps widening
• Vendor-layer consolidation (Kaseya under new CEO Rania Succar eyeing a potential IPO, NinjaOne at $5B valuation, N-able exploring a sale) is reshaping the economics of running an MSP and accelerating the case for scale
• The next 12–24 months will reward sellers who have done the preparation work: clean financials, documented operations, recurring revenue above 70%, and genuine security and compliance capabilities

If you want to understand where your MSP fits in this consolidation wave, or whether now is the right time to test the market, I'm happy to have a confidential conversation. No agenda beyond giving you a clear-eyed picture. You can reach me through guicarlos.com or connect on LinkedIn.

Gui Carlos, CFA, is a Principal at Walden Mergers & Acquisitions, a trusted Atlanta-based M&A firm since 1991. He focuses exclusively on MSP and MSSP transactions.

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