IT Services Valuation Multiples: The 2026 Complete Checklist
Quick Answer
IT services valuation multiples in 2026 vary materially by service type and recurring-revenue percentage: Managed Service Providers (MSPs): 6-12x EBITDA or 1-2x revenue (premium 12-15x for high-RMR + scale platforms); Cybersecurity services: 8-15x EBITDA (regulatory tailwinds drive premium); Cloud / DevOps services: 8-14x EBITDA; Custom software development: 4-8x EBITDA (lower than MSP due to project-based revenue); Staff augmentation / body shops: 3-6x EBITDA (commodity service); Specialty consulting (SAP, Oracle, ServiceNow, Salesforce partners): 6-12x EBITDA; BPO / managed support: 5-9x EBITDA. Multiple drivers: recurring revenue percentage (highest weight), customer concentration (target sub-25%), gross margin (35-50% MSP healthy), geographic diversification, platform partner status (Microsoft Gold, AWS Premier, Cisco Gold), and contract structure (multi-year vs monthly). Per Aventis Advisors’ IT Services Valuation Multiples 2015-2025 report, sector multiples expanded materially 2020-2022 and have compressed somewhat since but remain elevated vs pre-2020 baselines.
IT services valuation requires understanding the dramatic variation across service types. A pure managed service provider (MSP) with 80% recurring revenue and Microsoft Gold partner status commands 10-12x EBITDA. A custom software development shop with project-based revenue and 30% gross margin commands 4-6x EBITDA. A cybersecurity services firm with 12-month average contract length commands 10-15x EBITDA. Understanding the drivers is essential to defensible valuation.
This guide covers IT services multiples by service type (MSP, cybersecurity, cloud/DevOps, custom development, staff augmentation, specialty consulting, BPO), the key multiple drivers (recurring revenue %, customer concentration, gross margin, partner status, contract structure), the active acquirers in 2026 (PE-backed roll-up platforms and strategic consolidators), and the typical due diligence process for IT services M&A.
CT Acquisitions runs sell-side M&A processes for founder-owned U.S. businesses ($1M-$25M EBITDA). IT services represents one of our most active sectors, with multiple PE-backed roll-up platforms (Evergreen Services Group, Integris IT, Kelser Corporation, Coretelligent, Magna5, InterVision, Logically, plus 10+ others) actively acquiring MSPs and specialty IT services firms in 2026.
TL;DR
- Service type drives multiple: MSP 6-12x EBITDA, cybersecurity 8-15x, cloud/DevOps 8-14x, custom development 4-8x, staff aug 3-6x, specialty consulting 6-12x, BPO 5-9x.
- Recurring revenue percentage is the single biggest multiple driver. Target: 70%+ recurring for premium MSP multiples.
- Customer concentration: target sub-25%. Above 30% triggers material discount.
- Gross margin: MSP healthy range 35-50%. Below 30% triggers operational concerns.
- Platform partner status (Microsoft Gold, AWS Premier, Cisco Gold, Salesforce Platinum, ServiceNow Premier) drives premium 1-2 turns.
- Contract structure: multi-year (3+ years) > annual > monthly. Multi-year premium.
- Geographic concentration: single-metro is OK if metro is large; multi-state is premium.
- Active 2026 acquirers: Evergreen Services Group, Integris IT, Kelser, Coretelligent, Magna5, InterVision, Logically, plus 10+ others.
- Per Aventis Advisors 2015-2025 IT services M&A data: sector multiples expanded materially 2020-2022, compressed somewhat since, remain elevated vs pre-2020.
- Typical sell-side timeline: 3-6 months prep + 6-9 months active process for $5M-$15M deal value MSPs.
IT Services Multiples by Service Type
Managed Service Providers (MSPs)
- Sub-$1M EBITDA, <60% recurring: 4-7x EBITDA
- $1M-$3M EBITDA, 60-75% recurring: 6-9x EBITDA
- $3M-$10M EBITDA, 75-85% recurring: 8-11x EBITDA
- $10M+ EBITDA, 85%+ recurring + scale: 10-15x EBITDA
MSP is the most active subsector in IT services M&A in 2026, with 10+ active PE roll-up platforms.
Cybersecurity Services
- Sub-$1M EBITDA: 5-8x EBITDA
- $1M-$5M EBITDA: 8-12x EBITDA
- $5M+ EBITDA with specialty certifications: 10-15x+ EBITDA
Cybersecurity premium driven by regulatory tailwinds (HIPAA, SOC 2, PCI, state breach notification laws). Specialty certifications (CISSP staff, CMMC, FedRAMP authorization) drive additional premium.
Cloud / DevOps Services
- $1M-$5M EBITDA, AWS Premier or Microsoft Solutions Partner: 8-12x EBITDA
- $5M+ EBITDA: 10-14x EBITDA
Custom Software Development
- $1M-$3M EBITDA, project-based: 4-6x EBITDA
- $3M-$10M EBITDA, mix of project + retainer: 5-8x EBITDA
- $10M+ EBITDA with IP / product component: 6-12x EBITDA
Lower than MSP due to project-based (non-recurring) revenue and lower gross margins (typical 30-45%).
Staff Augmentation / Body Shops
- $1M-$10M EBITDA: 3-6x EBITDA
Commodity service. Multiples constrained by low gross margin (10-20% typical), labor arbitrage exposure, and customer concentration risk.
Specialty Consulting (Platform Partners)
- SAP, Oracle, ServiceNow, Salesforce, Microsoft Dynamics partners: 6-12x EBITDA
- Top-tier specialty (Salesforce Platinum, ServiceNow Premier, etc.): 9-15x EBITDA
BPO / Managed Support
- Call center / desktop support: 5-9x EBITDA
- Specialty BPO (healthcare RCM, finance/accounting): 7-12x EBITDA
Key Multiple Drivers
1. Recurring Revenue Percentage
The single biggest multiple driver. Multiples scale almost linearly with recurring percentage:
- 40% recurring: 4-6x EBITDA
- 60% recurring: 6-9x EBITDA
- 75% recurring: 8-11x EBITDA
- 85%+ recurring: 10-15x EBITDA
2. Customer Concentration
- Sub-15%: Premium
- 15-25%: Market
- 25-35%: 0.5-1 turn discount
- 35%+: 1-2 turn discount
3. Gross Margin
- MSP: 35-50% healthy, <30% concerning
- Cybersecurity: 40-55%
- Cloud / DevOps: 35-50%
- Custom development: 30-45%
- Staff aug: 10-25%
4. Platform Partner Status
- Microsoft Solutions Partner (formerly Gold)
- AWS Premier Partner
- Cisco Gold Partner
- Salesforce Platinum/Diamond
- ServiceNow Premier Partner
- SAP Gold Partner
Top-tier partner status drives 1-2 turn premium and broadens buyer pool (strategic consolidators often require specific partner status).
5. Contract Structure
- Multi-year (3+ years): Premium
- Annual auto-renew: Market
- Month-to-month: Discount
6. Geographic Diversification
- Single-metro (large): OK
- Multi-state: Premium
- National: Premium
7. Technical Certifications
CISSP, CISA, CISM, CRISC, AWS Certified Solutions Architect, Microsoft Certified Expert, Cisco CCIE. Staff certifications drive premium 0.5-1 turn.
Active 2026 Acquirers + Process
Active PE Roll-Up Platforms (10+ in 2026)
- Evergreen Services Group (PE-backed) — Largest MSP roll-up, 100+ acquisitions.
- Integris IT (PE-backed) — Major MSP consolidator.
- Kelser Corporation (PE-backed).
- Coretelligent (PE-backed).
- Magna5 (PE-backed).
- InterVision (PE-backed).
- Logically (PE-backed).
- Thrive (TPx) (PE-backed).
- Net at Work — Specialty platform partner consolidator.
- Centric Consulting.
- Plus 10+ smaller PE-backed regional platforms.
Strategic Acquirers
- Accenture (NYSE: ACN) — Continuous acquisition program.
- NTT Data.
- Wipro (NYSE: WIT).
- Cognizant (NASDAQ: CTSH).
- HCL (NYSE: HCL).
- Infosys (NYSE: INFY).
- TCS.
- Capgemini.
- DXC Technology (NYSE: DXC).
- Insight Enterprises (NASDAQ: NSIT).
- CDW (NASDAQ: CDW).
- Plus 10+ regional strategic acquirers.
Typical IT Services Sell-Side Process
- Pre-engagement diligence (no cost in CT model): Validate sale-readiness, identify pre-sale optimization opportunities, confirm market positioning.
- 3-6 months prep: Quality of Earnings (QoE), CIM (Confidential Information Memorandum), customer-by-customer revenue analysis, technical due diligence prep, employment agreements, key-person insurance.
- 1-2 months teaser + NDA process: Approach 30-50 prequalified buyers; convert to NDA + management presentation.
- 2-3 months IOI / LOI phase: Indications of Interest, then Letters of Intent. Narrow to 3-5 finalists.
- 2-3 months exclusive diligence: Confirmatory diligence, contract negotiation, financing.
- Closing: Signing + close.
Total typical timeline: 6-9 months active process for $5M-$15M deal value MSPs. Larger deals can take 9-12 months.
Frequently Asked Questions: IT services valuation multiples due diligence
What are typical IT services valuation multiples in 2026?
MSP: 6-12x EBITDA, cybersecurity: 8-15x, cloud/DevOps: 8-14x, custom development: 4-8x, staff augmentation: 3-6x, specialty consulting (Salesforce/ServiceNow/SAP partners): 6-12x, BPO: 5-9x.
What’s the biggest driver of IT services multiples?
Recurring revenue percentage. Multiples scale almost linearly: 40% recurring → 4-6x, 60% → 6-9x, 75% → 8-11x, 85%+ → 10-15x.
Who are active IT services acquirers in 2026?
PE roll-up platforms: Evergreen Services Group, Integris IT, Kelser, Coretelligent, Magna5, InterVision, Logically, Thrive (TPx), plus 10+ others. Strategic acquirers: Accenture, NTT Data, Wipro, Cognizant, HCL, Infosys, TCS, Capgemini, DXC, Insight Enterprises, CDW.
What is a healthy gross margin for an MSP?
35-50%. Below 30% concerning. Above 55% premium (suggests strong pricing power or specialty positioning).
How does platform partner status affect valuation?
Top-tier partner status (Microsoft Solutions Partner, AWS Premier, Cisco Gold, Salesforce Platinum, ServiceNow Premier, SAP Gold) drives 1-2 turn premium and broadens buyer pool. Required for many strategic acquirers.
What customer concentration triggers a discount?
Above 25-30% single-customer concentration: 0.5-1 turn discount. Above 35%: 1-2 turn discount. Diversify before sale (or accept lower multiple).
What is Aventis Advisors’ IT Services Valuation Multiples report?
Industry-standard reference for IT services M&A multiples 2015-2025 (updated annually). Aventis Advisors is one of the leading specialty M&A advisors for IT services sellers. Their data shows multiples expanded materially 2020-2022 and have compressed somewhat since but remain elevated vs pre-2020.
What’s the typical IT services sell-side timeline?
3-6 months prep + 6-9 months active process for $5M-$15M deal value MSPs. Larger deals 9-12 months. Total: 9-15 months from initial engagement to closing.
What’s the difference between project-based and recurring IT services?
Project-based (custom development, implementation): one-time revenue, lower multiples (4-8x EBITDA). Recurring (MSP, managed cybersecurity, ongoing cloud management): subscription revenue, premium multiples (8-15x EBITDA).
Does CT Acquisitions work with IT services sellers?
Yes. IT services is one of our most active sectors. We run sell-side M&A for MSPs, cybersecurity firms, cloud/DevOps services, specialty consulting, BPO. Buyer-paid model: seller pays nothing. We connect sellers to all 10+ active PE roll-up platforms + strategic consolidators.
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About the Author
Christoph Totter is the founder of CT Acquisitions, a buyer-paid M&A advisor headquartered in Sheridan, Wyoming. We run sell-side M&A processes for founder-owned U.S. businesses ($1M-$25M EBITDA). The buyer pays our fee at closing — the seller pays nothing. Connect on LinkedIn · Get in touch
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CT Acquisitions is a buyer-paid M&A advisor. The seller pays nothing — the buyer pays the success fee at closing.