MSP Market Insights 2025
Stay informed with the latest acquisition trends, valuation data, and market analysis for MSP businesses across the UK
Market Overview
The UK MSP market is experiencing unprecedented growth and consolidation activity
Market Size & Growth
Global MSP Market (5yr forecast)
Annual Growth Rate
The managed service provider industry is forecasted to reach £310 billion globally within the next 5 years, driven by digital transformation initiatives and increasing cybersecurity demands.
UK Acquisition Activity
Major Acquisitions (H1 2025)
Evergreen UK Acquisitions
H1 2025 has seen over 11 significant UK VAR/MSP acquisitions, with Evergreen Services Group alone acquiring 3 UK MSPs in Q4 2024.
Valuation Multiples
Current market multiples for MSP businesses across different revenue tiers
£250k-£1M EBITDA
EBITDA Multiple
All cash deals typical
£1M-£2M EBITDA
EBITDA Multiple
Mix of cash and earnouts
£2M-£5M EBITDA
EBITDA Multiple
Strategic premium
Premium Deals
EBITDA Multiple
Cybersecurity specialists
Key Market Trends
Important developments shaping the MSP acquisition landscape
Cybersecurity Premium
MSPs with cybersecurity specialization (MDRs) are commanding the highest valuations, often 1-2x above standard multiples.
- • SOC services in high demand
- • Compliance expertise valued
- • Security-first positioning
Geographic Expansion
Strategic buyers are acquiring MSPs primarily for geographic market expansion and local client relationships.
- • Regional market penetration
- • Local brand recognition
- • Established client bases
Talent Scarcity
Skills shortage in IT sector is driving M&A activity as companies acquire talent through business purchases.
- • Technical expertise premium
- • Retention packages important
- • Cultural fit considerations
Active Acquirers in UK Market
Major players actively acquiring MSPs across England
Strategic Acquirers
- Evergreen Services Group: Acquired 3 UK MSPs in Q4 2024 (ITBuilder, Certum, CIS Ltd), now owns 5 UK MSPs total
- Softcat: Made their first-ever acquisition in H1 2025, signaling market entry
- Ekco: Acquired Predatech (cybersecurity specialist) in May 2025
- Abacus Group: Recently acquired financial services-focused MSP
PE-Backed Roll-ups
- Redsquid: Continuing aggressive acquisition strategy across UK regions
- Flotek: Active in MSP consolidation with focus on mid-market
- Focus Group: Building national MSP platform through acquisitions
- International Buyers: US and European acquirers seeking UK market entry
Key Value Drivers
Factors that significantly impact MSP business valuations
Premium Value Drivers
- 80%+ Recurring Revenue: Predictable monthly service contracts
- Cybersecurity Focus: SOC, MDR, and compliance services
- Vertical Specialization: Financial services, healthcare expertise
- Long-term Contracts: 3+ year agreements vs annual
- Scalable Operations: Documented processes and procedures
- Geographic Market Position: Dominant local presence
Value Detractors
- Low Recurring Revenue: Under 50% monthly recurring
- Owner Dependency: Key person risk with founder
- Customer Concentration: Single client over 20% of revenue
- Aging Technology: Legacy systems and infrastructure
- High Churn Rates: Client retention below 90%
- Competitive Market: Saturated local market
Position Your MSP for Maximum Value
Use these market insights to optimize your business for a successful sale