Acquiring an MSP or IT services company looks straightforward on paper. You find a good target, agree on a price, sign an LOI, work through due diligence, then close. But if you’ve spent any time trying to grow through acquisitions, you know that it’s not so simple in practice.
This article focuses on the buyer side of the table and how to avoid the most common issues that derail acquisitions of MSPs, hosting providers, data center operators, and similar IT services businesses.
1. Get your financing story sorted before you shop
One of the fastest ways to lose credibility with a seller is to be vague about how you will actually fund the deal.
Before you seriously pursue opportunities, be clear on:
If you are using bank or SBA financing, assume it will take longer and require more documentation than the lender suggests. Expect that the “short list” of documents grows into a long one and build that padding into your timeline.
Also understand the type of lender you are working with. Some can approve loans locally. Others must send everything up the chain for sign off, which adds more delay. If you are competing with a buyer that has cash on hand, your slower funding path is a disadvantage unless you compensate in other ways.
The key is simple: do not surprise the seller with how your financing works, or with the time it will take.
2. Build a repeatable inquiry process
Many first time buyers approach their first deal with a “let’s just start asking questions” mindset. It feels flexible. But to a seller it looks disorganized and undermines confidence.
You are far better off with an agreed process and checklist that you use on every deal. At a minimum, split your questions into clear workstreams:
Start with the deal killers. Examples that often decide whether a deal is viable at all:
In most IT services deals, financial issues are the ones that truly kill transactions. Operational and technical issues tend to influence how you structure the deal, not whether you do it at all. So it usually make sense to start with the financials questions first.
3. Know what a “good fit” actually looks like
Before you send offers, be able to explain on paper why a particular opportunity makes sense for you. That narrative should cover:
Sharing that story alongside your offer gives the seller confidence that you are not just chasing assets.
You also need hard boundaries. For example:
If you are not clear on these questions, you risk getting deep into a process only to realize the opportunity never really fit your model. That is frustrating for everyone involved.
4. Align early on price, structure, and risk
In most MSP deals, it is common to see the majority paid at closing, with the balance spread across an earn out or a seller’s note. Sellers naturally worry about ever seeing that second piece, so you need to define:
Another helpful practice is agreeing on formulas that handle change between LOI and closing. If a major customer leaves or a major new account is signed during diligence, you do not want to renegotiate from scratch. You want to apply a pre agreed mechanism that is fair for both parties.
5. Protect momentum and avoid deal fatigue
Even a healthy deal has a clock on it. If you agreed to close in 60 days and you are still haggling on day 65, frustration starts to creep in.
Momentum is often what decides who wins a competitive process. When a seller has multiple similar offers, the buyer who moves first, responds quickly, and keeps energy in the process often wins, even at the same or slightly lower price.
On a practical level, that means:
Silence kills trust. If the seller can see documents sitting untouched in the data room and hears nothing from you, they will start to assume the worst.
6. Invest in trust, not just terms
Acquisitions in IT services are personal. Owners often feel a deep responsibility for their teams and clients. They care about who takes over.
You can reduce a lot of anxiety by:
This rapport only really proves its value when something goes wrong. If you have put the time in upfront, both sides are far more likely to work through surprises together instead of walking away.
Also watch out for overzealous advisors. Some attorneys rewrite agreements so heavily that the other side questions whether you genuinely want a deal. Remember that they are paid to remove risk, not to get the transaction done. You need to manage that balance.
7. Keep customers and staff steady after closing
What you do after closing is still part of the deal. If you walk in on day one and raise prices, tighten SLAs, change processes, and reorganize teams, you will almost certainly trigger churn.
A better approach is to “rock the boat” as little as possible at first. Coordinate with the seller on timing and communication. Prioritize continuity of service.
If staff feel aligned with your culture and fairly treated, they are far more likely to keep delivering the level of service that keeps customers loyal. If they are unhappy, that frustration shows up in response times, attitude, and ultimately in lost accounts.
8. Prepare your own bench and deal flow
Before you pursue opportunities in earnest, line up:
On the sourcing side, combine several channels: targeted outreach, monitoring listings (like ours), peer groups where members share opportunities, and industry events where you can build relationships over time.
Acquisitions can be one of the most powerful growth tools for an IT services company, but only if you handle the details with discipline and respect. Get your financing clear, lead with a repeatable process, align early on structure and risk, protect momentum, and treat trust as a core asset.
If you want to go deeper on the nuances behind these points, set aside some time to watch the full discussion on YouTube: https://www.youtube.com/watch?v=cqYhk9H92Gg&feature=youtu.be