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ChannelE2E Podcast 059: Service Leadership CEO Paul Dippell

Paul Dippell

Paul Dippell

Good evening, channel partners. Welcome to ChannelE2E Podcast 059 — our latest conversation with Service Leadership Inc. CEO Paul Dippell. We discuss VAR and MSP valuations, along with M&A trends based on Service Leaderships latest market data.

The good news: The IT channel is filled with M&A activity. The potential bad news: There could be a flood of sell-side companies as Baby Boomers look to exit their businesses. Overall, it’s a healthy market for those who smartly navigate it. Here’s the podcast:

If you’re hoping to scan the podcast here are some key time points:

  • 00:00: Introductions
  • 01:00: Who Is Paul Dippell? His history as an IT service provider and now as a consultant to the industry.
  • 02:15: M&A Valuations: What Paul is seeing.
  • 04:00: Multiples of revenue vs. multiple of EBITDA
  • 04:25: Product resale, T&M services, ‘real’ managed services and more.
  • 05:00: How much $1.00 of reseller revenue is worth in M&A.
  • 07:00: Break-fix hourly support revenue: How much is that worth in M&A?
  • 07:37: Professional and project services revenue: How much is that worth in M&A?
  • 08:00: How much is managed services revenue worth in M&A?
  • 12:00: Top-performing MSPs. What are their revenue mixes and valuations?
  • 13:00: The top one-quarter of MSPs: What are their profit margins?
  • 13:45: EBITDA multiples: What is the valuation for top MSPs?
  • 14:45: EBITDA multiples placed in three categories: Low-performers, better performers and best performers. And what it means to valuation.
  • 17:50: Why 2015 was a peak year for 2016. Can 2016 and beyond beat it?
  • 19:25: Why valuations have been rising.
  • 20:40: What’s causing the current M&A explosion.
  • 23:00: Why Equipment Manufacturers get into managed services. And out. And in.
  • 25:00: Why M&A is trickling down to smaller MSPs.
  • 26:55: Myth 1: Cloud’s impact on MSPs and their customers.
  • 30:00: The Amazon Web Services reality check.
  • 33:20: Myth 2: Managed services commoditizes?
  • 36:50: Deal Flow M&A: It’s rocking and rolling.
  • 37:30: For resellers and VARs: M&A trends.
  • 38:20: The aging solution provider, and the impact on M&A.
  • 40:40: A lot of sellers in the M&A market: Is that bad for valuations?
  • 46:05: Tracking Service Leadership’s next moves.
  • More time line updates coming shortly.

ChannelE2E Podcasts: Who Says What?

Chat IconOur podcast guests educate IT entrepreneurs and IT service providers about business development, management, transformation, partnering, growth and exits. Each CEO, executive or financial advisor personally drove:

  • Company Launches — vision, mission, passion.
  • Funding Stages — boot strap, friends and family, angel investments and venture capital.
  • Expansions — core team building, process building, automation and partnering.
  • Exits and transformations — IPOs, mergers, acquisitions and private equity deals.

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For ChannelE2E Podcast sponsorship information, email Amy Katz, president and CEO, After Nines Inc. Guest bookings are handled privately. We look forward to bringing you the best and brightest technology business builders Tuesday nights at 9:01 p.m. ET./6:01 p.m. PT — and sometimes in between.

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