B2B Niche IT Managed Services Provider
This acquisition opportunity centers around a regional managed IT services provider specializing in delivering outsourced IT support, network infrastructure management, help desk services, cloud migrations, and cybersecurity solutions to small and mid-sized businesses (SMBs). The company has operated for over 15 years, maintaining a reputation for reliability, fast ticket resolution, and consultative project-based IT upgrades.
With $3.6 million in annual revenue and $812,000 in adjusted EBITDA, the business is built on a base of 3-year recurring service contracts, supplemented by higher-margin project work such as server replacements, VoIP rollouts, security audits, and cloud transitions. Approximately 80% of revenue is recurring monthly fees (RMR), with the remaining 20% from projects and one-time hardware procurement.
The business serves 120+ active clients in healthcare, legal, logistics, and financial services industries that require strict compliance and uptime. All service delivery is handled in-house, with certified technicians and network engineers using ticketing, RMM (remote monitoring and management), and PSA (professional services automation) tools.
The company is an ideal SBA 7(a) acquisition target due to its cash-flowing, contract-backed revenue, low churn, asset-light infrastructure, and strong team. Risk lies in post-close client retention, maintaining service SLAs, and expanding higher-ticket cybersecurity packages. Buyers must be prepared to manage technical staff and maintain NOC (network operations center) uptime while executing a cross-sell and account expansion strategy.
Proposed SBA 7(a) Deal Structure
Given the contract stability and margin profile, this deal is highly conducive to maximum leverage under SBA:
Purchase Price: $3.25 million (4.0x EBITDA)
SBA Loan: $2.437 million (75%)
Buyer Equity Injection: $325,000 (10%)
Seller Note (Subordinated): $487,500 (15%) amortized over 5 years with 12-month interest-only period
Key structuring protections include:
20% clawback on seller note if more than 10% of MRR clients cancel within 120 days post-close
10% performance bonus to seller if cybersecurity revenue exceeds $600K in first year
5% note forgiveness if seller remains for full 12-month advisory period with verified client engagement
Seller to remain actively involved during transition as CTO advisor and board-level technology consultant.
Client and Revenue Breakdown
Client industries:
Healthcare (clinics, dentist offices, surgery centers): 35%
Legal and professional services: 20%
Logistics and warehousing: 15%
Finance/accounting: 12%
Construction and manufacturing: 10%
Nonprofit and government subcontractors: 8%
Revenue types:
Monthly Managed Services Agreements (MSAs): $2.88M (80%)
Help desk support
Network monitoring
Patching and antivirus
Endpoint management
Microsoft 365 admin
Project Work: $480K (13%)
Server upgrades
Cabling and switch installs
Email migration
Firewall deployments
Hardware and software resale (residual): $240K (7%)
Typical client contract:
3-year term, auto-renewing
Per-seat pricing: $95–$165/user/month
SLA: 4-hour response, 99.9% uptime target
Penalties for extended downtime (rarely triggered)
Quarterly business reviews and IT roadmaps included
Clients are assigned to pods by industry, size, and tech complexity. No client represents more than 6% of revenue; top 25 clients account for 68% of MRR.
Technical Team and Infrastructure
Staff:
4 Tier 1 help desk techs
3 Tier 2 engineers
2 Tier 3 network/security specialists
1 vCIO (virtual CIO) / client success
1 NOC manager (overnight monitoring)
2 admin and procurement
1 general manager
Service delivery tools:
ConnectWise Manage (PSA)
ConnectWise Automate (RMM)
Auvik (network monitoring)
Sophos Central / Bitdefender (endpoint)
Datto BCDR (backup)
Help desk runs 7 AM – 7 PM with on-call after-hours. NOC has redundancy for monitoring alerts and response. Documentation lives in IT Glue.
Buyers must retain senior engineers and Tier 2s via retention bonuses, performance pools, and potential equity phantom shares for continuity.
Sales and Marketing
The company currently invests ~$5,000/month in sales and marketing:
Google Ads, Bing PPC
SEO for “managed IT + city”
Cold email and LinkedIn campaigns
Partnership channel with local MSP referral groups
Webinars and lunch-and-learn events for cybersecurity education
Current growth comes primarily from referrals and renewals. Pipeline includes 22 active prospects totaling ~$90K MRR.
Post-close growth strategies:
Launch cybersecurity upgrade audit to entire base
Add outbound SDR targeting verticals with compliance mandates (e.g., HIPAA, SOC 2)
Expand into VOIP and co-managed IT for larger clients
Bundle managed detection & response (MDR) and email security with monthly pricing
Financial Summary
Revenue: $3.6M
COGS (tech labor, licenses): $1.52M
Gross Profit: $2.08M
SG&A (rent, sales, admin): $1.268M
Adjusted EBITDA: $812K (22.5%)
Gross margins:
Managed services: 57%
Project work: 42%
Hardware/software: 22%
MRR is highly sticky, with 93% retention YoY. Downgrades are minimal. Clients billed monthly by ACH or credit card.
AR aging is under 15 days on average. No delinquencies or disputes on record.
Legal and Compliance
HIPAA BAA agreements in place for all healthcare clients
Clean E&O and cybersecurity insurance: $2M policy
No pending litigation or SLA failure claims
Fully W-2 tech staff with NDAs and non-competes signed
Buyers should verify all contract assignment clauses, vendor licenses, and SOC audits (if applicable for top clients).
Working Capital Requirements
Payroll buffer: $95K–$110K
Software licensing float: $35K
SDR onboarding and pipeline push: $25K
Seller consulting/retainer: $25K–$40K
Rebrand or website upgrade: $10K–$15K
Ideal Buyer Profiles
Existing MSP operators consolidating regional footprint
Private equity-backed roll-up platforms
IT-savvy entrepreneurs with Tier 2 or MSP background
Cybersecurity firms adding recurring revenue base
Post-Close Execution Plan
Retain engineering team and meet top 25 clients within 30 days
Cross-sell MDR, phishing simulation, and compliance packages
Implement QBR (quarterly business review) cadence across entire base
Launch paid campaign targeting dentists, CPAs, and medical billing firms
Begin succession planning for Tier 3 staff and evaluate 24/7 help desk outsourcing options
Conclusion
This MSP offers an exceptional foundation for buyers seeking recurring contract cash flow with highly embedded client relationships. With SBA 7(a) financing, minimal capex needs, and a scalable team in place, a buyer can immediately cash-flow the business while expanding revenue through cybersecurity add-ons and co-managed IT. This opportunity is ideal for strategic acquirers or first-time buyers looking to enter the B2B services space with technical infrastructure, process maturity, and strong industry credibility already in place.
