KBS - Managed Service Providers - Market Insight

M&A ACTIVITY CONTINUES TO RISE WITHIN IT MANAGED SERVICES

The UK IT managed services sector is witnessing unprecedented growth with a surge in mergers and acquisitions (M&A). We have taken an in-depth exploration of the company sales landscape for this Managed Service providers (MSPs), presenting valuable insights into the key trends shaping company sales activity, including the strategic moves of prominent acquirers and the role of private equity in driving industry consolidation. As a result of us handling a number of completed deal transactions and continued outreach within this sector, here is an overview of the current trends we have noted in this sector. + RISING INFLUENCE OF PRIVATE EQUITY Private equity now drives around 70% of UK IT managed services M&A deals, fuelled by buy-and-build strategies aimed at consolidating market share. + EMPHASIS ON CYBERSECURITY AND CLOUD ACQUISITIONS Acquisitions in the cybersecurity and cloud sectors are growing as businesses respond to increasing cyber threats and cloud adoption, now comprising 40% of deals. + STRATEGIC MOVES IN DIGITAL TRANSFORMATION The rising demand for digital transformation, software development, and automation is prompting more acquisitions, particularly of companies providing bespoke IT solutions. + SECTOR RESILIENCE AMID ECONOMIC UNCERTAINTY Despite inflation and rising interest rates, deal values remain robust, reflecting confidence in the long-term growth of managed IT services. + MOVE TOWARDS FULL-SERVICE IT PROVIDERS Larger IT firms are acquiring smaller MSPs to offer comprehensive, end-to-end solutions, positioning themselves as one-stop-shop providers for SMEs.