IT services, VARs & Managed Services
The IT channel is consolidating on both sides of the Atlantic: and the gap between what average and well-positioned companies achieve in a sale has never been wider. We advise founders of value-added resellers, managed service providers, systems integrators, and IT consultancies in the lower mid-market through that market.
What Buyers Are Paying For
Buyers in this sector price a handful of metrics far more heavily than headline revenue:
Recurring revenue quality.
Managed services and support contracts are valued at a structural premium to resale and project revenue. The mix — and its trajectory — drives the multiple.
Services attach and gross margin.
Product resale alone is a pass-through; the services attached to it are where defensible margin lives.
Vendor and customer concentration.
Dependence on a single vendor program or a handful of customers is the most common valuation discount we see;
and often the most fixable with preparation time.
Certified delivery capacity.
In a labor-constrained market, a certified engineering bench is an asset buyers explicitly underwrite.
Who is Buying
The buyer universe spans US and European strategics building platform scale, private-equity-backed consolidators executing buy-and-build strategies, and financial investors entering the sector directly. Much of the most aggressive demand for European channel companies currently originates in the United States, which is precisely why a purely national process leaves value on the table in this sector.
We maintain active relationships across all three groups on both continents, we know who is acquiring, what they are underwriting, and what they have paid. That knowledge is the difference between a mailing list and a process.
A note for owners who
have been approached.
Channel consolidators run systematic origination: if your company fits a thesis, you will be contacted, often repeatedly. An inbound approach is useful information, not an obligation. One offer is not a market.
Martech, Adtech & Advertising Services
Marketing and advertising technology is consolidating on both sides of the Atlantic, and the gap between how generalist and specialized companies are valued has never been wider. We advise founders of performance marketing agencies, martech platforms, and data- and technology-driven advertising services businesses in the lower mid-market through that market.
What Buyers Are Paying For
Buyers in this sector are sorting companies into two tiers, and the space between those tiers keeps growing. A handful of things decide which tier a company falls into.
Proprietary technology and data.
Buyers continue to prioritize first-party data, measurement, and attribution capability: the parts of a business a competitor cannot replicate simply by hiring the team away. This is the line between a technology company and a services company wearing a technology label.
Recurring, retainer-based work over project revenue. Campaign-based and project-heavy mixes sit in the discount lane. Contracted, retainer-based relationships are what a buyer can underwrite well past the deal that won them.
The spread itself.
The premium for specialization is not incremental. It has moved from roughly 2x EBITDA in 2019 to 4x to 6x EBITDA today. Buyers are not simply paying more for agencies in general; they are paying substantially more for the ones that have made themselves difficult to replace, and substantially less for the ones that have not.
What “scale” means now.
Headcount alone no longer clears the bar. The scale buyers reward today is scale with technology: the capacity to compete with platform ecosystems and fund what AI adoption now requires. A smaller company with a genuine technology position will outprice a larger one without it.
Who is Buying
The buyer universe spans two structurally different types of acquirer, and the distinction shapes how a deal gets built.
Strategic acquirers, the global marketing and advertising groups pursuing capability and geographic buy-and-build, are consolidating the sector at its largest scale right now; they offer integration into an existing platform and, often, a path for a founder to keep building rather than exit outright.
Private-equity-backed platforms are the second force. More than forty are actively acquiring in performance marketing today, working the same thesis on repeat: acquire a platform agency, then bolt on complementary specialty firms.
That scarcity, on both sides, is not contained by geography. Cross-border capital flow between the US and Europe is at its strongest point in years, and a buyer’s thesis is just as likely to reach across the Atlantic as to stay within it. We maintain active relationships across both buyer types, on both continents, including direct relationships with specific strategic acquirers, and we know who is acquiring, what they are underwriting, and what they have paid. That knowledge is the difference between a mailing list and a process.
A note for owners who
have been approached.
Consolidators in this sector, strategic and private-equity alike, run systematic origination. If your company fits a thesis, you will be contacted, often repeatedly, sometimes by more than one buyer type pursuing the same segment. An inbound approach is useful information, not an obligation.
One offer is not a market.
Software & Data
Software is the most actively traded sector in technology, and the most unevenly priced. Two companies with the same revenue now sell for very different numbers, and the gap between them is widening rather than closing.
We advise lower mid-market vertical SaaS and B2B software companies, data and analytics businesses, and AI-enabled companies where the relevant buyer universe extends across the Atlantic.
What Buyers Are Paying For
Revenue quality, not revenue.
Buyers do not accept an ARR figure; they rebuild it. Contracted, renewing subscription revenue is underwritten differently from implementation fees, usage upside and project work. Retention is read gross as well as net, because expansion in a handful of accounts can conceal churn across the rest.
Growth and margin together.
Some businesses here sell software; others sell the data the software produces. Both are underwritten against the same question — what could an acquirer not reproduce. For a software business the answer is usually workflow embedding and switching cost. For a data business it is provenance and rights: how the dataset was acquired, whether the contracts confirm the company owns what its own product generates, and whether a competitor could simply regenerate it. AI has raised the price of genuinely scarce data and collapsed the price of the rest.
AI that shows up in the numbers.
lmost every software company now presents an AI story, and buyers have responded by testing it rather than listening to it. Positioning that survives that test is paid for. Positioning that does not is worse than silence.
Your best buyer may not be in your sector
Concentration and mix
Customer concentration and a heavy services mix are the two most common discounts in this sector — and two of the most addressable before a process. Each is priced twice: once in the multiple, and again in what is held back, deferred or made contingent.
Who is Buying
The buyer universe spans strategic software platforms, data and information businesses buying coverage rather than capability, private-equity platforms and the companies they already own, specialist technology investors, and serial acquirers that buy to hold. Financial buyers and their platforms now account for the majority of software transactions by number; strategic acquirers remain decisive where the acquisition closes a capability gap.
That universe is genuinely transatlantic — more so here than in any other sector we cover. North American acquirers are the single largest source of buyers for European software companies by number of transactions, and capital moves in the other direction too. In software, a national process is a structurally incomplete one.
We track who is acquiring, what they are underwriting and where individual companies fit. That knowledge is the difference between a mailing list and a process.
If you have been approached
An inbound approach tells you that your company fits an acquisition thesis. It does not tell you that the caller is the best buyer; or that their offer is the market.
One offer is not a market.