Solganick & Co: MSP Acquisitions Gain Momentum Despite Q3 M&A Slump
Deal News | Nov 21, 2024 | EIN
Solganick & Co., an investment bank and M&A advisory firm, reports that despite an overall downturn in the technology services M&A market, the Managed Service Provider (MSP) sector showed notable resilience in the third quarter of 2024. The market update reveals that while M&A transactions in IT services overall decreased from the previous quarters, MSP acquisitions remained robust, marking over 80 deals in Q3. MSPs are highlighted as an attractive financial sector due to their recurring revenue streams and scalability, making them defensive against economic fluctuations. This trend is expected to continue as M&A activity rebounds and the demand for outsourcing IT support among SMBs rises. Among the notable deals were Kingsway Financial Services' acquisition of Image Solutions and Magna5's acquisition of FullScope IT. Solganick & Co. utilized data from S&P Capital IQ and input from M&A news outlets for market insights.
Sectors
- Technology Services
- Financial Services
Geography
- United States – The article references over 60 MSP M&A transactions occurring in the US and mentions US-based companies involved in these deals.
Industry
- Technology Services – The article focuses on M&A activity within the technology services industry, specifically highlighting Managed Service Providers (MSPs), which are a segment of this sector.
- Financial Services – The involvement of investment banks and M&A advisory firms like Solganick & Co. marks this as part of the financial services industry, emphasizing strategic financial maneuvers through acquisitions.
Financials
- $19.5 million – The price paid by Kingsway Financial Services Inc. to acquire MSP Image Solutions.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Solganick & Co. | M&A Advisory Firm | Company | An investment bank and advisory firm focused on software and IT services, providing insights and data-driven M&A services. |
| Kingsway Financial Services Inc. | Acquirer | Company | A company that acquired MSP Image Solutions for $19.5 million as part of its diversification strategy. |
| Image Solutions | Target Company | Company | An MSP acquired by Kingsway Financial Services for diversification purposes. |
| Magna5 | Acquirer | Company | A managed IT, cybersecurity, and cloud solutions provider for SMBs that acquired FullScope IT. |
| FullScope IT | Target Company | Company | A managed IT services business with a strong presence in the US acquired by Magna5. |
| New Charter Technologies | Acquirer | Company | Part of Oval Partners' portfolio, acquired MSP Dynamic Edge. |
| Oval Partners | Private Equity Firm | Company | A private equity firm whose portfolio company New Charter Technologies acquired Dynamic Edge. |
| Dynamic Edge | Target Company | Company | An MSP acquired by New Charter Technologies. |