In the past few weeks, I’ve written a few times about some of the pitfalls of mergers and acquisitions, not just in managed services, but in general. I still maintain the incredible risks to both buyers and sellers and should you want to know what I said previously, please read my earlier articles.

Today, I would like to turn my attention to a more positive view of M&A and provide some helpful advice on the matter of when and how M&A should integrate into your strategic goals, whether as a buyer or a seller of an MSP practice. Instead of calling this article the best motives, it might be more accurate to call it the more successful reasons behind M&A deals.

M&A for Purposes of Entering MSP Profession

One of the most successful implementations of M&A can be found when a company purchases an MSP practice predominantly to enter the managed services profession. The most common example of this can be found in the office copier sector. For at least a decade office copier companies have been making aggressive inroads to the managed services profession, principally by purchasing MSP companies.

You can do a quick search and find examples of these M&A transactions, and for the most part, they have been successful. The reason these deals work out so well is that the acquiring party can use a vast majority of the MSP they bought.

As previously discussed, one of the reasons M&A deals fall apart post closing is due to the tremendous integration complexities involved. Redundant systems, people, and often competing policies and procedures are just a few of the integrations which have to occur before one MSP can fully and effectively absorb another MSP business. This is, of course, assuming there is an integration strategy at all. In my experience, most M&A deals are driven by the executive and financial leadership and do not often involve service delivery and technical teams at all.

M&A for Strategic Service Expansion

Another common reason for M&A is the expansion of a company’s managed services portfolio. There are some excellent examples of strategic M&A deals, done primarily to add a new managed services product. Acquiring another MSP for a unique service line is not only wise, but it can also be one of the more efficient methods for adding new service capabilities. This is especially true if the new service line would cost a lot of money and resources to develop organically.

Again, integration becomes a factor in M&A success here, but perhaps less so than when integrating two completely redundant and similar MSP organizations.

I stand by my previous claims that M&A deals strictly to grow revenue are risky for both the buyer and seller. Pursuing M&A deals where there is real synergy for both sides significantly raises the chances of M&A success.

Post A Comment
YouTube Logo | MSPAlliance

Subscribe to MSPAlliance on YouTube!

Explore a world of valuable content, including full-length podcast episodes and clips, thought-provoking special interviews, immersive events, enriching webinars, live streams, and more.

Join our community on YouTube, subscribe to our channel, and elevate your MSP journey!

Mobile and Laptop device image of YouTube MSPAlliance Channel | MSPAlliance

Have questions?

We're here to help! Fill out the form below and we will get back to you as soon as possible.

First Name *
Last Name: *
Contact Email: *
*Required Fields
Note: It is our responsibility to protect your privacy and we guarantee that your data will be completely confidential.





Contact us


510 Meadowmont Village Cir, #289 | Chapel Hill, NC 27517

MSP News

Sign up for MSP News, the weekly newsletter bringing you news and analysis from the managed services industry.