Selling a Managed Services Business

Most MSPs are priced off seller earnings and how dependable the agreements are, not just top-line revenue. Buyers usually pay more when agreements are assignable, seat true-ups are routine, and ticket volume is tracked by client so margins are explainable. You can get a quick estimate with Rejigg’s free valuation calculator, which adjusts for owner add-backs and references real transaction multiples.

Yes, many MSP acquisitions can use an SBA 7(a) loan, especially when managed services revenue is supported by signed agreements and the buyer can show the business can run without the seller doing daily delivery. Lenders still dig into customer concentration, contract terms, and whether financials match what the PSA and invoices show. To model payments and down payment scenarios, use the SBA loan calculator.

No. Brokers typically charge 5–10% of the sale price for running a process you can run yourself with the right tooling and buyer access. Rejigg gives you pre-vetted buyers, digital NDAs, a built-in data room, and deal tracking to compare offers side-by-side. Sellers run a clean, confidential process without paying a percentage fee. Start with the preparation guide.

Most MSP sales land in the 3–9 month range from “ready to sell” to closing, depending on how clean your agreements are and how quickly you can answer diligence questions. Deals often slow down when seat counts do not reconcile, contract terms vary by client, or security access is hard to explain. Rejigg keeps NDAs, document sharing, and buyer Q&A in one place, which usually cuts the stop-and-start.

Buyers usually start with a client revenue schedule, your agreement list, and a few PSA exports that show tickets by client and basic service performance. They also want a tool stack summary and any vendor commitments like seat minimums that can hit margin. You do not need to share everything on day one. Rejigg’s data room lets you stage documents and control access after NDAs are signed.

Working capital is the cash buffer needed to run the business day-to-day, like making payroll before client payments land. In MSPs, it often comes down to billing terms, license and hardware pass-through timing, and whether you front vendor costs for clients. Buyers may set a target working capital amount at closing so they are not funding a cash gap immediately. Rejigg’s offer comparison view helps you see each buyer’s working capital ask side-by-side.

An earnout means part of the sale price is paid later if the business hits agreed targets after close. In MSPs, earnouts commonly tie to client retention through a renewal window or to maintaining a certain level of managed services profit. They show up when buyers feel uncertainty around renewals, service desk cost-to-serve, or owner-dependent relationships. Rejigg’s deal dashboard keeps earnout terms visible so you can compare the full deal, not just the headline number.

Seller financing means you take part of the purchase price over time, like you are lending the buyer money. In MSP deals, it is common because it helps buyers fund the purchase and gives them more confidence in the transition. You are taking credit risk, so repayment terms, collateral, and default protections matter. If different buyers propose different cash versus seller note mixes, Rejigg’s offer comparison view helps you compare the real risk-adjusted value.

Buyers look at which clients would hurt if they left, and they also look at profit concentration. A large client with high ticket volume, lots of after-hours work, or custom tooling can be a bigger risk than their revenue suggests. Expect questions about the top clients, the agreement terms, and who owns the relationship day to day. Keeping a simple client-by-client profile in your data room makes this easier and less stressful.

Usually, yes. Resale and pass-through can make revenue look bigger without adding much profit, and it can create cash timing risk if you pay vendors before the client pays you. Buyers still like resale when it supports a sticky managed services relationship. They just want it separated so they can see what the managed services engine earns. A clean lane-by-lane breakdown avoids value fights later.

Beyond price, buyers focus on transition length, any holdback tied to retention, what happens if key staff leave, and what security statements you are making about past incidents and current controls. They will also negotiate which client agreements need consent or re-signing. Rejigg keeps these terms organized so you can compare full offers, including timeline and risk, in one view.

Client reference calls usually happen late, after a buyer is serious and you have a client communication plan. MSP clients can get nervous if they hear “sale” too early, especially if they lean on a specific technician or the owner relationship. On Rejigg, buyers are pre-vetted and sign NDAs digitally, which helps you control timing and reduce unnecessary disruption.

Many MSP deals use a 30–90 day structured handoff, then lighter support for a few more months if the buyer wants it. The right plan depends on who runs QBRs, escalations, and sales today, plus how owner-dependent the top accounts are. Buyers want continuity in the client-facing roles and clear rules for when the seller steps in. The transitioning guide helps you map the handoff by role and by client.

Taxes depend on your entity and how the deal is structured. MSP sales often allocate value across customer relationships, equipment, and goodwill, and those pieces can be taxed differently. Buyers may push for a structure that helps them, even if it changes your after-tax proceeds. Model your net outcome early with your CPA so you are not negotiating blind. Rejigg helps you run the process, but tax advice needs to be specific to you.

Most buyers ask for a non-compete so you do not start or join a competing MSP for a set time in a defined area. The boundaries should match reality, including where your clients are and what services you actually provide. If the restriction is too broad, it often becomes a negotiation point. Rejigg’s negotiation guide covers how to pressure-test these terms in plain English.

Most MSP deals break when buyers find agreement problems, margin surprises, or security and access issues they cannot get comfortable inheriting. Common examples are month-to-month clients presented as contracted, billed seats that do not match tenant or endpoint counts, ticket volume that makes key accounts unprofitable, and weak credential controls. Rejigg keeps diligence tighter by running everything through a single data room with clear access control under NDA.

Usually, no. Start with the agreements that drive the deal: your biggest accounts, your noisiest accounts, and any client that is month-to-month or vague on scope. Tightening a small number of high-impact agreements often changes buyer confidence quickly. The prepare-to-sell guide shows how to prioritize the cleanup without turning it into a months-long legal project.

Confidentiality comes down to controlling access and timing. Vet buyers before they can contact you, require NDAs before sharing anything sensitive, and share documents through a secure system instead of email. On Rejigg, buyers are pre-vetted and sign NDAs digitally, and then you control who sees client lists, contracts, and security documentation in the data room. That reduces leaks and keeps operations steady while you explore options.