Cogent Growth Partners: Insights on MSP Acquisitions
Deal News | Dec 30, 2024 | EIN
The managed service provider (MSP) sector has seen a significant surge in mergers and acquisitions (M&A) driven by both private equity firms and MSPs themselves seeking expansion. ChannelE2E interviews experts from Cogent Growth Partners—Rick Murphy, Bruce Teichman, and George Sierchio—to delve into best practices for MSP acquisitions. The conversation covers strategic factors such as expanding talent, geographic reach, and market verticals, and emphasizes the importance of acquisitions being a complement rather than a replacement for organic growth. Key insights include the critical nature of alignment with average customer size, the pitfalls of acquiring merely for scale, and the need for a comprehensive integration plan for staff and technology post-acquisition. The article highlights that while many MSPs are interested in acquisitions, few possess the in-house expertise required to navigate complex M&A processes effectively. Financial discipline and proper due diligence are vital in assessing and completing deals, underscoring the necessity of a sound M&A strategy.
Sectors
- Managed Services
- Private Equity
- Mergers and Acquisitions
Geography
- United States – The discussion by Cogent Growth Partners and the practices highlighted are primarily relevant to the U.S. MSP market, where much of the private equity M&A activity is occurring.
Industry
- Managed Services – The article focuses on mergers and acquisitions in the managed service provider (MSP) sector, highlighting the trend of MSPs acquiring other MSPs to expand services and capabilities.
- Private Equity – Private equity involvement is noted as a significant factor in MSP M&A activity, providing financial backing for deals in this sector.
- Mergers and Acquisitions – The core of the article is about M&A activity within MSPs, discussing strategies, challenges, and best practices.
Financials
- 90 to 95 percent – Completion rate of deals after the letter of intent (LOI) is achieved, demonstrating the effectiveness of due diligence and planning practices.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Cogent Growth Partners | Advisor | Company | Cogent Growth Partners provides strategic advisory services for MSPs engaging in M&A activities. |
| ChannelE2E | Publisher | Company | ChannelE2E is a media outlet focusing on IT channel partner strategies and the MSP sector, which conducted the interview with Cogent Growth Partners. |
| Rick Murphy | Expert | Person | Rick Murphy is one of the experts from Cogent Growth Partners, providing insights into M&A strategies for MSPs. |
| Bruce Teichman | Expert | Person | Bruce Teichman is an expert from Cogent Growth Partners involved in M&A discussions for MSPs. |
| George Sierchio | Expert | Person | George Sierchio is another expert from Cogent Growth Partners contributing to the MSP M&A dialogue. |