The Deal
Cantey Tech Consulting announced its acquisition of Network Computing Group in May 2024, marking another strategic add-on acquisition for the LNC Partners-backed platform. The transaction brings together two managed services providers operating in the Southeast region, with Network Computing Group based in Virginia.
This deal represents a continuation of the roll-up strategy that LNC Partners has been executing through Cantey Tech Consulting. The buyer has been actively pursuing acquisitions to build scale and expand its geographic footprint across the Southeast managed services market. Financial terms of the transaction were not disclosed by either party.
Network Computing Group operates as a traditional MSP, providing technology solutions and support services to business clients. The company's Virginia location adds to Cantey Tech's regional coverage and client base in the Southeast corridor.
Strategic Logic
The acquisition fits squarely within LNC Partners' stated roll-up strategy for building a larger MSP platform through strategic acquisitions. Geographic expansion appears to be a key driver, with Network Computing Group's Virginia operations extending Cantey Tech's reach into new markets within the Southeast region.
Key strategic fit factors include:
- Geographic complementarity: Virginia market entry expands Cantey Tech's Southeast footprint
- Service capability enhancement: Additional technical resources and client relationships
- Platform scaling: Increased revenue base to support further acquisitions and operational leverage
- Market consolidation: Participating in the ongoing fragmentation-to-consolidation trend in regional MSP markets
The deal also provides LNC Partners with additional scale to pursue larger acquisition targets or command better vendor terms across the combined platform. For a PE-backed roll-up strategy, each add-on acquisition should theoretically increase the multiple arbitrage opportunity at exit.
Valuation Context
While deal terms remain undisclosed, this transaction occurs within a Southeast MSP market that has seen consistent private equity interest and valuation support. Regional MSPs with established client bases and recurring revenue models continue to attract buyer attention, particularly from PE-backed platforms executing roll-up strategies.
The Southeast region has proven attractive to MSP consolidators due to its business-friendly environment and growing small-to-medium business market. Comparable transactions in the region have typically valued quality MSPs at 4-8x EBITDA, with premiums for companies demonstrating strong recurring revenue percentages and client retention metrics.
LNC Partners' willingness to continue making add-on acquisitions through Cantey Tech suggests the sponsor sees value creation opportunities at current market pricing levels. The undisclosed nature of the deal terms is typical for smaller add-on acquisitions where strategic fit often outweighs pure financial metrics in the decision-making process.
What MSP Owners Should Know
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Roll-up platforms remain active acquirers: PE-backed MSPs like Cantey Tech continue pursuing add-on acquisitions despite market uncertainty. This creates ongoing exit opportunities for regional MSPs seeking liquidity.
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Geographic expansion drives deal logic: Buyers are paying for market access and client relationships, not just financial metrics. MSPs in attractive geographic markets may command premium valuations even with modest scale.
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Southeast markets attract consolidator attention: The region's business growth and fragmented MSP landscape make it a target-rich environment for both strategic and financial buyers executing consolidation strategies.
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Platform deals create competitive dynamics: As PE-backed platforms build scale through acquisitions, independent MSPs face increasing competitive pressure. This dynamic can accelerate the decision timeline for owners considering exit strategies.