MSP Mergers and Acquisitions: Slowing Market?

MSP Mergers and Acquisitions: Slowing Market?

msp-mergers-and-acquisitionsIn the software market, vendors have spent 2009 buying up one another at somewhat deflated valuations. But in the managed services market, I sense that the pace of MSP mergers and acquisitions deals has slowed a bit in 2009 compared to 2008. My key thought: Are there too many sellers and too few buyers?

To be clear, MSP merger and acquisition activity certainly continues. A prime example: Carpathia Hosting, which serves federal agencies and enterprises, on Sept. 2 acquired ServerVault, a Dulles, Va.-based managed hosting provider that also targets federal agencies and enterprises. The deal comes 15 months after Spire Capital acquired Carpathia Hosting, according to a press release issued Sept. 2.

But generally speaking, our MSPmentor M&A Tracker hasn't seen too many deals in 2009. (If you're aware of a deal we overlooked, send along the buyer and seller company names and we'll add them to the M&A Tracker list.)

The core problem: I think the MSP industry is filled with too many companies looking to sell and too few looking to buy. I get emails all the time from MSPs who are curious about how to find a buyer. I get far fewer from those who are looking to buy.

Instead of "looking" to sell, I think MSPs need to spend more time looking to build their assets. The stronger you are and the more noise you'll make as a successful company, the more likely you will attract a potential buyer -- even if you don't intend to sell.

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