The Deal
In July 2024, Thrive announced its acquisition of The Longleaf Network, a managed services and cybersecurity provider based in North Carolina. The transaction represents another strategic add-on acquisition for the PE-backed platform, which is supported by Berkshire Partners and Court Square Capital Partners.
The Longleaf Network operates as a converged MSP/MSSP, delivering IT infrastructure management and cybersecurity solutions to clients across the Southeast region. The company has built a reputation for comprehensive security services alongside traditional managed IT offerings, positioning it as an attractive target for consolidation. Deal terms were not disclosed, consistent with the majority of middle-market MSP transactions.
This acquisition continues Thrive's buy-and-build strategy under private equity ownership, adding both geographic presence and specialized capabilities to the platform's service portfolio.
Strategic Logic
The acquisition delivers clear strategic value for Thrive across multiple dimensions. Geographic expansion represents the primary driver, as The Longleaf Network's North Carolina presence extends Thrive's footprint deeper into the Southeast market. This regional expansion allows the combined entity to serve clients across a broader geographic area while potentially capturing larger, multi-location accounts that span multiple states.
The cybersecurity capabilities integration creates meaningful cross-selling opportunities within Thrive's existing client base. Key strategic fit factors include:
- Enhanced security service delivery combining The Longleaf Network's MSSP expertise with Thrive's managed services platform
- Expanded talent pool and technical capabilities in high-demand cybersecurity specializations
- Increased scale for vendor negotiations and technology partnerships
- Broader service portfolio positioning for competitive differentiation
The deal also strengthens Thrive's position in the mid-market segment, where clients increasingly demand integrated IT and security solutions from a single provider. Rather than building cybersecurity capabilities organically, acquiring an established MSSP accelerates time-to-market and brings proven client relationships.
Valuation Context
While deal terms remain undisclosed, this transaction occurs during a period of sustained interest in converged MSP/MSSP platforms. Southeast regional providers have commanded premium valuations due to favorable market dynamics, including strong economic growth and increasing cybersecurity spending among mid-market businesses.
Converged providers typically trade at higher multiples than pure-play managed services companies, reflecting the recurring revenue stability and higher margins associated with security services. The cybersecurity component often drives valuation premiums of 10-20% compared to traditional MSPs, particularly for providers with established security operations centers and compliance expertise.
PE-backed platforms like Thrive often pay strategic premiums for acquisitions that deliver both geographic expansion and capability enhancement. The dual benefit of market expansion plus service portfolio strengthening justifies higher multiples, especially when the target brings differentiated technical expertise and established client relationships in high-value service areas.
What MSP Owners Should Know
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Converged positioning drives premium valuations. MSPs with established cybersecurity practices and MSSP capabilities command higher multiples than traditional managed services providers. The integration of security services creates stickier client relationships and justifies premium pricing, directly translating to higher exit valuations.
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Geographic diversification attracts strategic buyers. Regional MSPs with strong local market presence become attractive targets for PE-backed platforms seeking geographic expansion. Establishing dominant positions in specific markets, rather than thin coverage across broad areas, creates more compelling acquisition targets.
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Technical specialization accelerates acquisition timelines. Buyers increasingly prefer acquiring specialized capabilities rather than building them organically. MSPs with deep expertise in high-demand areas like cybersecurity, compliance, or vertical-specific solutions can command faster sale processes and competitive bidding situations.
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PE platforms prioritize scalable service delivery models. Acquirers focus on MSPs with documented processes, standardized service delivery, and scalable operations that can integrate smoothly into larger platforms. Investing in operational excellence and scalable systems before going to market significantly improves acquisition attractiveness and valuation outcomes.