MSP M&A, IT Glue Have Their Day at Kaseya Connect 2024

KASEYA CONNECT — Kaseya Connect opened in Las Vegas Monday with an M&A seminar for MSPs and GlueXperience for the company's IT documentation software customers.

The Kaseya Connect M&A Symposium intends to help MSPs navigate that tricky process. Voccola has plenty of experience there. Kaseya has acquired 16 companies to build its business of selling technology to MSPs.

"As a company, what we do at Kaseya is service MSPs,” Kaseya CEO Fred Voccola said during his M&A keynote.

And many if not most MSPs don’t have great experience selling their companies.

“Most people in this room got into this business because they are technicians, engineers — they like to solve and fix problems,” Voccola said. “And by accident, they go through this [M&A].”

Voccola said he expects the number of MSP acquisitions to rise this year, although the rate of MSP M&A will likely slow soon.

“M&A is hard to do,” he said, saying frequent acquirers are slowing down because of high interest rates, too much competition to find the right deal, a need to focus on organic operations and digest previous acquisitions. “But when it works, it’s a home run. It can be an amazing force multiplier.”

Voccola said MSPs that want to be acquired should maximize their valuation by focusing on key metrics such as recurring revenue percentage, EBITDA margins, backlog and contracted revenue. He said the growth, cost and TAM expansion create MSP value.

“There are no tricks,” Voccola said. “It’s about numbers. There’s no way to dress your company up to make it look sexy. Other things like, how good is your staff? What are your people like? What is your stack like? Those are important, but if you really want to maximise your value, it's the numbers.”

He had advice for companies looking to buy as well, such as, “If your company is not healthy, don’t go buying someone. A lot of organizations try to mask operation deficiencies and their poor financial performance by acquiring companies.”

See the slideshow above for more about the M&A seminar and GlueXperience from Kaseya Connect in Las Vegas.