Industry briefing · IT services
What IT services businesses sell for, and why
IT and software service businesses sold on BizBuySell from 2021 to 2025 went for a median 2.93x owner earnings. Buyers weigh retention first. Acquisitions of managed service providers worldwide have climbed steeply since 2023, and what buyers pay for is contracted recurring revenue. They pay a premium for it, and they discount everything that is not it: project work, hardware resale, and clients who could leave next month.
At a glance
- Published median
- 2.93xon owner earnings
- Typical range at sale
- 5x to 9xon EBITDA
- Who buys
- PE-backed MSP platforms, strategic IT firms, regional consolidators
- Weighed first
- RtRetention
What are IT services businesses worth?
2.93x owner earnings was the median multiple paid for IT and software service businesses sold on BizBuySell from 2021 to 2025. The measure sits beside each figure, because multiples of owner earnings, EBITDA, and revenue do not compare with each other.
| Multiple | On | Source |
|---|---|---|
| 2.93x | Owner earnings | Owner earnings multiple, IT and software service businessesBizBuySell, IT & Software Service Business Valuation Multiples & Financial Benchmarks (businesses sold 2021–2025) |
| 5x to 9x | EBITDA | Typical range at saleFNDRS industry briefing |
| 9.8x | EBITDA | Disclosed MSP dealsAventis Advisors, 2026 |
| 5x to 7x | EBITDA | Size splits the priceDrake Star, 2026 |
- Owner earnings
- Profit before the owner's own pay and perks, interest, taxes, and depreciation. Small, owner-run businesses are priced on it.
- EBITDA
- Earnings before interest, taxes, depreciation, and amortization, with the owner paid like a hired manager. Larger companies are priced on it.
Who buys IT services businesses?
Most MSPs are bought by repeat consolidators that hold what they buy, most of them backed by private equity. In the published deal data, sponsors pay more than corporate buyers.
- PE-backed MSP platforms
- strategic IT firms
- regional consolidators
- The busiest consolidators. Evergreen Services Group, backed by Alpine Investors, is the busiest MSP buyer in Aventis's data, with 35 deals from 2015 to 2025, ahead of Twenty and Thrive. Aventis Advisors, 2025
- Repeat buyers do most deals. Drake Star finds strategic acquirers lead MSP consolidation: the ten busiest each closed four or more deals in two years, while most financial investors made two or fewer. Drake Star, 2026
- Sponsors pay more. Over 27 percent of Aventis's IT services deals since 2015 involved a private equity sponsor, as buyer or platform backer; sponsors paid a median 11.5x EBITDA, strategic buyers 9.8x. Aventis Advisors, 2026
What do buyers check first in an IT services business?
Buyers look first at contracted recurring revenue, then at how clean the earnings are: owner pay, software spend, and the books. They now also test whether the firm uses automation to run itself. Two IT firms with the same revenue can be an agency and an annuity. The difference is the share of revenue on managed-service contracts and the rate at which those clients stay.
Contracted monthly recurring revenue is what is being bought. Project and resale revenue is priced far lower.
Client retention is read over years. A churn rate under five percent is a different business to a buyer.
Ticket data shows whether the engineers run the desk or the owner does.
Vendor certifications and security practices are diligence. A buyer audits the stack it is inheriting.
Client concentration in one vertical or one account is priced, however sticky the contracts feel.
- Clean earnings first. An Evergreen M&A adviser warned that heavy software spend, unclear books, and a below-market owner salary all shrink adjusted EBITDA once a buyer reviews the numbers. Channel Insider, 2026
- Recurring revenue share. An Evergreen M&A adviser called 70 to 75 percent recurring revenue a solid position; a ChannelCon panel said buyers also weigh documentation, culture, and how AI runs operations. Channel Insider, 2026
- AI use is diligenced. Drake Star says buyers now separate MSPs that run on their own AI automation from those only selling AI, and underwrite on proven margin gains, not seller claims. Drake Star, 2026
The element buyers weigh first
Retention
Share of customers and revenue that stays from one year to the next.
What it measures. Gross and net revenue retention by customer cohort over the trailing twelve months.
Today and prepared, side by side
The difference is preparation, and in IT services it shows up in a handful of measurable places. This is the shape of it, drafted for the industry and read against what buyers actually pay.
| Today | Prepared | |
|---|---|---|
| Multiple on EBITDA | 5.2x | 8.5x |
| Revenue on managed-service contracts | 45% | 80% |
| Client churn a year | 14% | 5% |
| Engineers who close a ticket without the owner | Some | All |
Illustrative figures for IT services. Your numbers come from the calculator.
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