Merger and acquisition activity among MSPs increased in 2025 over 2024, and MSP 501 companies say they expect the pace to increase more in 2026.
According to tech investment bank Drake Star, there were 320 MSP acquisitions through the first three quarters of 2025. That’s eight more than in three quarters of 2024, which finished with 383 MSP acquisitions.
MSP 501 companies are far more likely to acquire other MSPs than sell themselves, and close to half are looking to buy. In the 2025 MSP 501 survey, 137 MSPs on the 501 said they acquired a company in 2024 while only 10 were bought and 25 took private equity money. When asked what they expected over the next 12 months, 240 said they expected to acquire an MSP with only eight anticipating being bought and 15 said they expected to take private equity money.
Much MSP consolidation is fueled by portfolio companies such as New Charter Technologies, Evergreen Services Group, Blue Alliance and The 20 MSP that have expanded through acquisitions, usually picking up much smaller MSPs. These types of MSPs will likely gain momentum. For instance, Shield Technology Partners, funded by OpenAI-backed Thrive Holdings, has acquired nine MSPs since it started last June.
“MSP consolidation will continue and likely accelerate through M&A,” said Kevin Damghani, CEO of MSP ITPartners+. “Valuations and EBITDA multiples should remain in a similar range to what we saw in 2025, especially for well-run MSPs with strong retention and clean financials.”
With so many MSPs looking to acquire, the market is good for acquisition targets. And most MSPs are getting inquiries about selling.
“Like any other MSP, we get all of these solicitations and all kinds of interest,” said Ahmed Mahmood, CEO of MSP 501 No. 244 Ocean Solutions. “Peers are asking, ‘hey, do you want to sell? Do you guys want to consolidate?’ So there is more money. There is more consolidation happening. I’ve seen MSPs this year who say ‘we sold, we sold, we sold." And they’re not only selling, they're going back to other MSPs saying, ‘hey, we sold. We're happy. Why don't you sell as well?’ So they're basically all being recruited to go recruit more, which tells you that there is more money to buy more MSPs.”
Blue Mantis, No. 326 on the MSP 501, has acquired five MSPs since the start of 2024. Blue Mantis CEO Josh Dineen said acquisitions have combined with organic growth to strengthen his MSP in the areas of network, carrier services, data protection, IT service management, and IT operations management.
“Although we have seen market pressure around capital spending and large traditional IT projects, 2025 was a year of continued expansion for Blue Mantis,” Dineen said. “Our biggest challenge now is to mature all these investments and maximize their return, while ensuring we continue to deliver exceptional business value to our clients—without sacrificing quality for either our customers or our employees.”
M&A Integration Comes with Challenges
Despite the growth of MSP acquisitions, integrating companies can be a tricky business. Spinning acquisitions into gold can be difficult if acquiring MSPs don’t have the right strategies in place. Successful integration often means keeping leadership and key personnel post-acquisition. If those key people leave, clients will often follow.
“In 2026, the MSP industry will likely see the exposure of roll-ups that chased scale without building operational sophistication, as buyers increasingly prioritize measurable efficiency and outcomes,” said Chuck Canton, CEO of MSP No. 35 Sourcepass. “As a result, stronger, more mature MSP platforms will acquire underperforming providers.”
“The best organic MSPs will rise, the bottom will fold or sell,” said Erik Braden, managing partner of Braden Business Systems, ranked 116th on the 2025 MSP 501. “Consolidation will continue. The PEs rolling up will realize that their forecast is falling short, leading to headcount reduction, service quality reduction, and client attrition. They will need to sell to next buyer prior to an implosion.”
XTIUM was created in 2024 through the merger of ASTG and Evolve IP and ranked No. 9 on the 2025 MSP 501. Former XTIUM CEO Russ Reeder, who oversaw the integration, said large mergers bring internal technology challenges that could impact their ability to scale.
“When you grow through acquisition, you have all these systems and all these technologies, and that part is difficult, and I think that's where a lot of these larger MSPs that have grown through acquisition will fail,” Reeder said. “They haven't implemented new, scalable financial systems. They haven't gone through and consolidated the tools on the back end, and there's just so much tech debt that they are just waiting to pass on to the next owner. That's one thing that we did differently, we really created a platform to be able to scale.”
Another challenge after an acquisition is holding on to customers of the acquired MSPs.
“We signed a couple clients this year that left their MSP because after they bought, the price went up and the quality went down,” Ocean Solutions’ Mahmood said. “And from our perspective, I think you will see more consolidation next year than this year.”