If you think selling your T&M-heavy MSP is in your future, think again. Strategic and institutional buyers aren’t interested in taking on a business that operates like a vintage dial-up service—unpredictable, inefficient and full of surprises. Here’s what they’re actually looking for.
Strategic vs. Institutional Buyers: Know the Difference
Institutional buyers, like private equity firms, want stability. They’re interested in models that annuitize revenue, like financial services or healthcare, where clients stick around year after year. A well-run MSP with recurring revenue has a client retention rate of around 98%. That’s the kind of predictability they crave.
Strategic buyers—other MSPs looking to expand—also want to see MRR. With high interest rates and fewer financing options, even these buyers are picky. They’re only jumping in if they see a solid path to growth without a ton of risk. And T&M? That’s the very definition of risk.
Transition or Get Left Behind
If you’re still doing T&M, your potential buyers are limited to those looking for undervalued shops they can transform. Why make it harder than it needs to be? Transition to a managed services model, focus on building recurring revenue, and watch as your business becomes a hot commodity. The market isn’t waiting for you to catch up. Make the move now, or get comfortable with being left behind.