Managed Services M&A: All Covered Seeks Growth to $1B

Service vs. reseller revenue is super-important.

MSPs need to drive more services revenues than product revenues. Plus, All Covered needs to understand the MSPs’ various services revenues: project services, block time break fix or pure managed services?

Trajectory: Is the MSP growing or has it had flat growth historically?

The longer the MSP has been growing consistency the more confident All Covered is to make an offer.

Culture: What is the CEO and executive team? If the owner is a kook, All Covered typically moves on…

Valuations: Based on revenue? Sales? EBITDA? What’s it based on? All Covered’s reaction: A big driver is the financial at the bottom line, EBITDA. What’s the real profitability, and what’s it going to be under All Covered Ownership?

None of All Covered’s nine most recent acquisitions were looking to sell.

All Covered wants to be the largest MSP on the ocean, but thinks there’s room for many boats on the water. Teichman mentioned a big, hairy, audacious revenue goal of $1 billion over the long haul, with potential international aspirations as well.

The latest All Covered acquisitions are all-cash deals. “Cash is king.” (MSPmentor does not know if that’s all up-front or part of a multi-year earn-out.)