Subscribe To Our Daily Enewsletter:

MSP Acquisition: Thrive Buys Tier1Net for Financial Services Push

Thrive has acquired Tier1Net, a managed IT services provider (MSP) focused on the financial vertical. Thrive, backed by M/C partners, has now made five MSP acquisitions while under private equity ownership.

The deal reinforces private equity’s growing influence across the IT service provider and MSP software markets — with more PE companies set to make platform acquisitions and tuck-in deals this month, ChannelE2E has confirmed.

Meanwhile, the other Thrive acquisitions involved:

LinkedIn: Marc Capobianco, president, Tier1Net

LinkedIn: Rob Stephenson, CEO, Thrive

In a prepared statement about the latest acquisition, Thrive CEO Rob Stephenson said:

“We’re extremely excited to be partnering with Tier1Net to expand Thrive’s Financial Services practice in New England. Their long-term, loyal customers will be well-served by the combination of Thrive’s enhanced suite of Cybersecurity, Public, Private & Hybrid Cloud Next Generation Managed Services, along with Tier1Net’s Financial Services knowledge and commitment.

Added Tier1Net CEO Marc Capobianco:

“The combination of Thrive and Tier1Net is truly a technology gamechanger for New England Financial Institutions. The expanded product and services capabilities that our clients will gain as a result of this transaction will benefit them all. It’s a pleasure to be joining this first-class organization that has become one of the leading MSPs in the Northeast.”

Financial terms of the buyout were not disclosed.

MSP Valuation Clues: Most MSPs — which tend to have heavy recurring revenue — are selling for about 4X to 8X annual EBITDA, ChannelE2E believes. The multiples tend to be 4X to 6X for all cash up-front deals. The higher valuation deals tend to involve pure recurring revenue, healthy EBITDA profit margins (15 percent plus) and performance-based earn outs over a year or two, according to ChannelE2E conversations with M&A participants. In rare cases, top-notch MSPs can fetch 10X annual EBITDA valuations.

MSP Mergers, Acquisitions and Private Equity

Vertical market MSPs can also fetch higher valuations — and they’ve been attracting plenty of buyout activity along with private equity investments. Example deals include:

Meanwhile, more private equity dollars could be set to flow into the MSP market. For instance:

Related Content

Return Home

No Comments

Leave a Reply

Your email address will not be published. Required fields are marked *