GCG’s Q4 2024 Managed IT Services and MSP Market Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples, and the state of the middle-market M&A environment.

2024 was a transformational year for the Managed IT Services (MITS) and Managed Service Provider (MSP) industries, both from a sector growth and market consolidation perspective. Based on the volume of M&A transactions that GCG has closed to date and our backlog of deals, we see continued acceleration of this trend for the duration of 2025.

The market is being fueled by increasing demand for cloud computing, cybersecurity, digital transformation, and fully integrated UCaaS platforms. As businesses seek to offload complex IT operations, MSPs are becoming essential partners, providing end-to-end services that improve efficiency and reduce costs.  This growth has sparked an unprecedented wave of M&A activity, with larger MSPs seeking to expand their portfolios and geographic reach while smaller providers desperately explore every avenue to achieve scale. Additionally, valuations in the MSP space are at an all-time high, reflecting strong strategic and investor interest in the “multiple arbitrage” opportunity inherent in a category where there is a linear correlation between scale and EBITDA multiples.

Notable Q424 highlights in the category:

• Robust Market Growth:  The MSP sector recently surpassed $400B, and continues to grow at 13% – driven by cloud adoption, digital transformation and rising cyber demands
• Unprecedented Private Equity Demand:  71 announced transactions in Q4 alone, with an equal balance of new platform and add-on activity
• AI and Digital Transformation at the forefront from an innovation, consolidation, and valuation driver perspective

Click here for the full update.

See here for all Technology News and Updates

Get in Touch

Tell us a little about yourself and we will get in touch as soon as we can.