M&A Leaders: Why Clarity Is Key If You Want to Sell Your MSP
… worked really hard to build that represents a significant part of your identity. Clarity helps manage the emotional impact and ensures you’re making the decisions on your best behalf as well as the other people affected by the deal,” Mueller said.
Looking Back
Neil Medwed led a Texas-based MSP for 26 years before selling to and joining Meriplex. He told the partner audience that if he went back in time equipped with the knowledge he now has, he would have built his business much differently.
He said he would have relied more on key performance indicators (KPI) to measure his business. He also pointed to peer groups as a way for partners to acquire key information and compare themselves to peers. He also said he would have managed more with his head than with his heart. He said that some MSPs will benefit from right-sizing their business.
“If you right-size your business, you can invest in better tools. You can get better bonuses. You can bring more to the bottom line and be more valuable as a company. Whether you want to sell or not, it’s a for-profit, so look at financials,” he said.
Finding a Fit
Strom, whose private equity company has acquired 12 MSPs over the last several years, said it’s important for MSPs to take time to ensure that they understand the character of the prospective buyer. For that reason, she said Riverside often delays on sending over a letter of intent to the partner.
“These due diligence and final stages are important to make sure that you honor and respect the buyer and that you want to do this,” Strom said.
USwired’s Robin Hau recently spoke to Channel Futures about his experiences with M&A. He emphasized the importance of finding a cultural fit.
“Cultural fit encompasses a wide range of factors, such as leadership styles, communication styles, employee attitudes and organizational values,” Hau said in a Q&A. “A misalignment in any of these areas can lead to conflicts, misunderstandings, and ultimately, a failed integration.”
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