The Managed Service Providers (MSP) market is undergoing a phase of rapid consolidation driven by artificial intelligence, managed cybersecurity and the growing outsourcing of IT infrastructure. Against this backdrop, technology M&A deals and the acquisition of technology companies are gaining prominence among private equity funds, international platforms and strategic groups.
In this report, advisors at Baker Tilly Tech M&A analyse trends in the MSP market, major acquisitions in the sector and growth prospects up to 2034, with data updated to Q1 2026 on investment, valuation and transaction activity.
The study includes an analysis of infrastructure MSPs, managed cybersecurity service providers (MSSPs), cloud-managed services on hyperscale platforms, connectivity providers (UCaaS, SD-WAN, IoT) and sector specialists in healthcare, legal, finance and the public sector.
This does not include pure-play SaaS resellers, break-fix service providers, traditional integrators and IT consulting practices within the Big Four, which operate under distinct business models.
What does the Managed Service Providers (MSP) market encompass?
A Managed Service Provider (MSP) is a company that offers ongoing technology management services, including IT infrastructure, cybersecurity, cloud services, connectivity and end-user support, under subscription or fixed-fee contracts.
This model has established itself as one of the most significant segments within the technology M&A market, thanks to its recurring revenue streams, high customer retention and increasing operational sophistication.
Trends that are transforming the MSP market
Artificial intelligence is driving demand for managed services
Artificial intelligence is not replacing MSPs, but is increasing the complexity of the technology infrastructure. The management of data, models and cloud environments is driving demand for specialist providers capable of operating critical environments at scale.
Convergence between MSPs and MSSPs driven by regulation
The entry into force of regulations such as NIS2 and DORA has made cybersecurity a central component of managed services. This has accelerated the convergence between MSPs and MSSPs, increasing the strategic importance of providers with 24/7 SOC capabilities and advanced regulatory compliance.
Digital sovereignty and the growth of the European cloud
Demands for digital sovereignty and data residency are driving the growth of the European cloud and the relocation of workloads. This trend is creating new opportunities for local operators and fuelling acquisitions of technology companies.
Public funding and the digitalisation of the SME sector
Digitalisation programmes across Europe are accelerating the uptake of managed services within the SME sector, which is establishing itself as one of the main drivers of growth in the MSP sector and of consolidation activity through the acquisition and sale of technology companies.
Market consolidation and the rise of tech M&A
The MSP market is entering a phase of structural consolidation, driven by buy-and-build strategies, private equity investment and the creation of pan-European platforms. This environment is leading to a sharp rise in technology M&A deals, particularly involving companies with recurring and scalable business models.
Nearshore as a driver of operational efficiency
Nearshore centres in Eastern and Southern Europe have become a strategic asset for MSPs, enabling them to optimise operating costs and scale up technical capabilities in an environment where there is a shortage of specialist talent.
Analysis of investment and M&A activity in the MSP market
Transaction activity in the European MSP market in Q1 2026 confirms an environment of active consolidation.
Europe accounts for 61% of global transactions, with a clear predominance of strategic buyers and private equity funds, which account for the majority of deals involving platform strategies and acquisitions (bolt-on).
Recent transactions reflect this trend towards consolidation:
- Strategic acquisitions in managed cybersecurity and cloud services.
- Mergers of IT service providers with a pan-European focus.
- Private equity investments focused on scalable platforms.
In terms of company valuation, MSPs trade at multiples of 8x to 12x EBITDA, whilst high-quality MSSPs can command higher multiples due to their critical and regulated nature.
Las adquisiciones Bolt-on acquisitions typically range from 5x to 7x EBITDA, whereas consolidation targets in mid-market segments typically range from 4x to 6x EBITDA, creating a significant value-creation differential in platform strategies.
MSP market growth outlook up to 2034
The European market for Managed Service Providers is experiencing sustained structural growth, with growth rates varying by sub-segment:
- Global MSP market: CAGR of between 9.5% and 13.9% through to 2030, driven by IT outsourcing and the adoption of cloud models.
- MSSP and managed cybersecurity: A CAGR of over 15%, making it the fastest-growing segment of the market.
- Cloud-managed services: Growth of between 12% and 16%, driven by artificial intelligence and the optimisation of cloud spending.
- SME sector: A CAGR of over 14%, establishing itself as the main driver of M&A transaction volume in the technology sector.
Exit Planning for MSP technology companies
Market growth and increasing consolidation activity have made Exit Planning a strategic consideration for the founders of technology companies.
Preparing a business for a future sale involves optimising key factors such as recurring revenue, customer diversification, operational scalability and the efficiency of the business model.
An increasing number of companies in the MSP sector are beginning to prepare for a sale with the aim of maximising value in future mergers and acquisitions involving technology companies.
M&A advisers specialising in technology companies
At Baker Tilly Tech M&A, we advise on the sale and acquisition of technology companies in sectors such as software, IT services, cloud computing, cybersecurity and managed services. Download the full report compiled by our M&A advisers and gain access to a detailed analysis of the Managed Service Providers market:
- Trends in the MSP sector
- Technology M&A activity
- Valuation multiples
- Main acquisitions
- Growth prospects
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Market Research for the MSP Sector 2026
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