CT Acquisitions Details 2026 MSP Valuation Shifts as MRR and Cybersecurity Drive Pricing

Key Takeaways

• CT Acquisitions reported that MSPs with high recurring revenue commanded up to 3x higher multiples than project-heavy peers.
• Cybersecurity depth and customer concentration emerged as the strongest secondary valuation drivers.
• New market data from N2M Capital Advisors and PwC shows increased private equity activity and rising deal competition in 2026.

CT Acquisitions published its MSP Managed Service Provider M&A Multiples Report 2026 on July 1. MSP deal valuations are moving in distinct bands tied to monthly recurring revenue (MRR), and the structure of that revenue dictates how buyers approach every size category.

MSPs with more than 70% MRR traded at materially higher multiples across all size segments compared to firms with heavier project workloads. That difference ran between 1.5x and 3.0x depending on revenue. According to Auxo Capital Advisors, MRR-heavy and cybersecurity-led MSPs experienced consistent pricing pressure throughout mid-2026.

MRR reliably predicts the upper or lower boundary of a valuation. Sub-$1 million MSPs with less than 50% MRR traded at 3.0x to 4.5x seller discretionary earnings (SDE), while those with more than 70% MRR landed between 5.0x and 7.0x. For mid-market MSPs between $3 million and $10 million in revenue, high-MRR examples reached 8.5x to 11.0x adjusted EBITDA, while lower-MRR peers settled closer to 6.0x to 8.0x.

Buyers link MRR directly with debt underwriting confidence. Private equity (PE) groups can secure more favorable financing terms from lenders when revenue is contracted and predictable, expanding their ability to fund higher purchase prices. Given that private equity participated in 69% of disclosed MSP deals in 2025, as reported by N2M Capital Advisors, this financing dynamic strongly influences market multiples.

A report from PwC noted that U.S. M&A deal value reached $1.2 trillion in the first five months of 2026, almost double the same period a year earlier. Broader M&A liquidity supports competitive tension across sectors. This demand is reflected in Axial’s 2026 survey, where 46.7% of dealmakers attributed upward valuation pressure to buyer competition for quality assets.

At the high end of the MSP range, the CT Acquisitions report showed that platform-scale firms between $10 million and $25 million in revenue with cybersecurity practices and strong MRR reached 10.0x to 13.0x adjusted EBITDA. Evergreen Services Group, New Charter Technologies, Coretelligent, Ntiva, and Dataprise continued to be active platform acquirers through Q1 2026, prioritizing firms with SOC 2, ISO 27001, and managed detection and response (MDR) components.

Security capability combines attestation, documented processes, tools, and dedicated security operations centers (SOC) or outsourced MDR. Buyers actively separate MSPs that operate security as an add-on from those that treat it as a core managed service. According to transaction data, only the latter group secures the 1.5x to 2.5x multiple lift that appears in larger deals.

Customer concentration drives the sharpest valuation deductions. When the top 10 customers account for more than 40% of MRR, valuations typically drop by 1.0x to 1.5x. Once concentration crosses 60%, it can reduce multiples by as much as 2.5x across almost every size segment, as buyers price in the financial risk of anchor clients departing post-acquisition.

Operational maturity also influences outcomes. MSPs that standardize their professional services automation (PSA) or remote monitoring and management (RMM) tools see better positioning during due diligence because tool maturity lowers post-close integration costs. For example, an MSP using ConnectWise Manage or Autotask with consistent time tracking typically navigates the M&A diligence process more smoothly than an organization running fragmented internal systems.

Between 2020 and 2022, MSP multiples were 1.0x to 2.0x higher than comparable 2024 through early 2026 transactions. That earlier era was shaped by historically low federal interest rates. Once the Federal Reserve held its target rate between 5.25% and 5.50% in mid-2023, the market reset. While rates later stabilized at 4.25% to 4.50%, the financing climate remains distinct from early pandemic conditions.

The current market recovery is uneven. MSPs with high MRR, integrated cybersecurity, and well-defined vertical specialization rebounded strongest in 2026. Conversely, lower-quartile MSPs, particularly those with fragmented revenue and limited security capabilities, continue to trade near the valuation troughs experienced in 2023 and early 2024.

Recurring revenue, security maturity, and customer mix now influence valuations more heavily than raw top-line revenue. Buyers prioritize long-term stability over short-term project work. With buyer competition for quality assets rising, as noted by Axial, MSPs that invest early in MRR concentration and core security capabilities command stronger pricing power in 2026 negotiations.