When it comes to M&A (merger and acquisition) activity in the MSP market, Evergreen Services Group sits in the middle of the action. Backed by private equity firm Alpine Investors, Evergreen has invested in more than 50 MSPs since 2017. Among the latest acquisitions: Two MSSPs (managed security services providers).
Poke around Evergreen, and the key names to know include Ramsey Sahyoun -- co-founder and M&A partner at the firm. Sahyoun and his peers at the firm continue to crisscross North America, meeting with hundreds of MSPs to discuss potential investment and scaling opportunities. On center stage at IT conferences, Sahyoun describes key M&A nuances that MSPs should keep in mind. Off stage, he dives deeper into conversations with MSPs who are charting near-term or long-term exit strategies.
So what has Sahyoun seen and heard amid all of that travel in 2022? In this ChannelE2E podcast, he describes the latest MSP M&A trends; how rising interest rates influence the market; and where the industry may be heading in 2023.
Here's the conversation:
Video linkThe conversation covers:
- 0:00 - Introductions
- 0:32 - When, why and how Evergreen Services Group started investing in the MSP sector.
- 1:45 - Evergreen Services Group's relationship with private equity firm Alpine Investors.
- 3:08 - Evergreen's mission: Building the best possible home for SMB organizations and their leaders.
- 4:07 - Evergreen has acquired 57 MSPs to date, including 15 in 2022. More recently the company has organized itself around three regional constellations of businesses. Sahyoun explains why.
- 7:07 - Do MSP owners remain with their businesses after they sell their businesses to Evergreen? Here are the variables and considerations.
- 9:16 - M&A trends in the MSP market for 2022 -- what Sahyoun has seen so far.
- 11:45 - Even as M&A activity potentially plateaus, a massive amount of activity continues to happen. Sahyoun explains why.
- 12:58 - What rising interest rates mean for M&A activity and MSP valuations.
- 15:25 - Have MSP sellers adjusted their valuation mindsets amid the rising interest rates?
- 16:37 - Potential M&A trends for MSPs in 2023: The demand for quality earnings, and the growing focus on MSPs that actually perform and grow their businesses to increase their valuations.
- 18:52 - Evergreen Services Group also owns two MSSPs -- Virtual Armour and Hurricane Labs. The strategy explained.
- 21: 00 - How Evergreen Services Group allows its MSPs to maintain business autonomy.
- 21:36 - For more info: Visit www.EvergreenSG.com, or reach out to Ramsey directly ([email protected]).
- 22:19 - Conclusion.
