October 2022

Market Update: Managed Service Providers Q3 2022

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Managed Service Providers (MSPs) will remain attractive investments as buyers enjoy the nature of longer-term contracts with proven MRR and a scalable land and expand the model.

According to Globe Newswire, the global MSP market is expected to grow from $243.3 billion to $557.1 billion in 2028 – a CAGR of 12.6%. 7MA sees M&A activity remaining strong given the highly fragmented nature of the MSP space as sponsors and strategics look to increase scale and capture emerging technology market tailwinds to expand their geographic footprint.

Third-quarter 2022 recorded 50 deals in the MSP market with a significant increase in median deal size. There are several trends positively impacting the MSP landscape:

1. The continued shift from traditional on-prem servers to a cloud environment
2. Hybrid work models increasing the likelihood of cybersecurity threats
3. Increased digital adoption complicating current infrastructure

7MA has completed numerous M&A transactions in the MSP space and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Tim Frye, Steve Buffington, or Tanner Lange if you would like to learn more about MSPs.

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