Maximise The Exit: The M&A Long Game for MSPs, Resellers and SaaS platforms.

The things I’ve learnt from supporting the sale of 5 security and infrastructure companies in the last 2 years. 

Building a technology company – whether it's an MSP, an IT service provider, a cutting-edge SaaS platform, or a robust cybersecurity solution – is a monumental achievement. It’s fun, it’s heartbreaking and God-forbid you get out alive. But it’s a hot topic in our line of work, and I often get pulled along the journey of companies wanting to sell for the next huge multiplier. So, what do potential purchasers really look for when evaluating a technology business for acquisition? Does it change if it’s private equity versus a bigger firm? 

Now, this is not prescriptive M&A advice, and it comes from the marketing lens only - but in my experience from running TechTent, I’ve seen firsthand how the right preparation, particularly around your market presence and pipeline, can significantly impact valuation and deal success. It’s not just about your balance sheet; it’s about your story, your systems, and your future potential.

The examples I draw from are ones where the multipliers have been in excess of 10x. Or where the business owner started Company A and sold for 6x multiplier, then started Company B and invested in strong sales and marketing and subsequently sold for 18x multiplier. 

Now, in my opinion, acquirers typically approach a deal from one of two primary angles:

Strategic or Financial. 

Understanding these perspectives is crucial for positioning your business for a successful sale.

The Two Motivations for Acquisition: Strategic vs. Financial

The Strategic Purchase

A strategic acquirer isn't just buying your company; they’re buying a piece of their future. This type of purchase is driven by the need to acquire a specific capability, a unique toolset, an experienced team, or a foothold in a new region. Their goal is to integrate your assets to strengthen their existing operations, expand their market reach, or fill a critical gap. Or hell, just to even take you out. 

The Financial Purchase

A financial acquirer is primarily focused on the numbers. They are looking for strong revenue streams, healthy profit margins, predictable growth, and opportunities for financial improvement. Their goal is to generate a significant return on investment, often through scaling the business, realising synergies, or preparing it for a future, even larger exit.

Read below the line to see common scenarios in which we see most acquisition

The Undeniable Power of Strategic Marketing & a Robust Sales Pipeline

Regardless of whether an acquirer is driven by strategic capabilities or financial performance, one factor consistently elevates your company's appeal and valuation: a well-oiled, strategic marketing engine driving a predictable sales pipeline. 

I know from direct experience - this is the core difference between a big payday versus a “oh, it's a nice offer but I still have to work”.

1. For Strategic Purchases: Demand Marketing Builds Sex Appeal. 

When an organisation is looking to acquire a specific capability, team, or regional presence, they want to buy something that is cool but something that is stable. A nice equilibrium on the crazy/hot quadrant.

Awesome marketing helps you to:

Gain Visibility & Establish Authority: Strategic marketing, through thought leadership, content creation, and PR, positions your company as an authority in its niche. This isn't just about leads; it's about reputation. Gartner research continually highlights that B2B buyers are 60-70% through their purchase journey before engaging sales. Your marketing ensures you're already known, respected, and on their radar long before an M&A conversation even begins. This visibility makes you a more obvious and less risky strategic target.

Create Employee Pride & Satisfaction: A strong brand identity and market presence fostered by marketing directly translates to employee pride and satisfaction. Your team knows they're part of something awesome, well-respected, and growing. This stability is invaluable. A strategic buyer isn't just acquiring technology; they're acquiring people. A happy and engaged workforce, proud of their company's standing, makes for a far more stable and successful integration, significantly reducing post-acquisition employee walkouts.

Drive Incoming Revenue & Awareness: While the primary driver for a strategic buyer isn't just revenue volume, consistent incoming revenue and widespread awareness of your capabilities make your strategic asset far more stable and less speculative. Telling the market your recent wins, case studies or value proposition helps to make you more sought-after than your competitors. 

 2. For Financial Purchases: Push the button and you get the monies! 

For financial buyers, your strategic marketing and sales pipeline aren't just important; they are the data-driven heart of your valuation. A well built pipeline marketing engine (like what we build) gives clarity on your sales pipeline, conversion, forecast and market demand. 

What can a marketing engine focused on the sales pipeline do? Well, it will build:

Consistent Sales Pipeline & Forecasting Accuracy: Financial purchasers scrutinise your ability to generate new business. A strong marketing engine that demonstrates orchestrated lead generation, effective lead nurturing, and a clear path to deals created across the marketing funnel is a goldmine. It proves you have a system, not just a series of industry events or half-arsed executive roundtables that no one remembers. Forrester's analysis consistently shows that companies with a well-defined marketing and sales funnel will command higher valuations. This is the difference between a 3x multiplier and a 20x multiplier.

Transparent Source of Revenue: Acquirers want to know where your revenue comes from. Strategic marketing allows you to accurately show that a significant majority of your revenue is new and sourced directly from your marketing function, and specifically what initiatives across online, offline, inbound and outbound. This provides clear evidence of your company's intrinsic growth capabilities, not just reliant on existing relationships or individual sales heroics. This gives clarity to the growth potential of your business and mitigates the risk of the poor deal hygiene sitting in your CRM.

Predictability and Hockey Stick Potential: The holy grail for financial buyers is the potential for hockey stick growth. When we build our marketing engines, we know the levers for hockey-stick growth. A strong marketing system will know when to pull these levers, and this shows an acquirer a clear, repeatable process that feeds your sales team with a snowball effect of pipeline opportunities.

 Your Exit Strategy Starts Today

As CEO of a B2B technology marketing company, I've witnessed time and again how neglecting long-term strategic marketing can leave significant value on the table during an acquisition. Buyers are increasingly sophisticated; they look beyond the immediate P&L to assess the true engine of your growth.

Ping me on LinkedIn if you want to learn more about what I’m talking about. 

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Here are three common scenarios for Strategic Purchases:

1.  Acquiring Niche Cybersecurity Expertise:

The Target: A cybersecurity firm with deep specialisation in areas like GRC, or managed services, or forensics. 

Why a Buyer Would Purchase: A larger security firm or a PE backed security initiative might acquire this company to immediately gain a high-demand capability they lack, differentiate their offerings, or meet growing client demand for specialised security services. They're buying the knowledge, the certifications, and the trusted processes. And as always, they’re always looking for ways to make money from their investment.

2.  Gaining a Foothold in a New Geographical Market:

The Target: An IT service provider with a strong local presence and established client base in a region where the acquirer has little to no penetration.

Why a Buyer Would Purchase: To expand their operational footprint, gain immediate access to a new customer segment without the slow build-out, and leverage local market insights and relationships. They're buying the local network, the brand recognition, and the existing revenue stream in that territory. We see this a lot in regional MSP acquisition, specifically for regional areas that have a loyal employee base that can take remote work from bigger cities.

3. Integrating a Proprietary SaaS Solution to Enhance Product Suite:

The Target: A SaaS platform offering a unique feature set or workflow automation tool that complements a larger software vendor's existing product line.

Why a Buyer Would Purchase: To rapidly expand their own product features, enhance competitive advantage, streamline operations for their current customers, or prevent a competitor from acquiring a valuable technology. They're buying the technology itself, the user base, and the dev team.

Here are three common scenarios for Financial Purchases:

1.  Scaling a Recurring Revenue Stream:

The Target: An MSP or SaaS company with a high percentage of recurring monthly revenue from locked-in managed services deals, low client churn, and predictable contract renewals.

Why a Buyer Would Purchase: To immediately boost their own recurring revenue base, which is highly valued for its predictability and lower customer acquisition cost over time. They're buying predictable cash flow and customer lifetime value.

2. Capturing a High-Growth Market Segment:

The Target: A technology platform or service provider operating in a rapidly growing market. This might look like an AI tool acquisition, or perhaps a niche service like Pen Testing.

Why a Buyer Would Purchase: To capitalise on future market opportunities and secure a leading position in an emerging sector, anticipating significant financial returns as the market matures. They’re buying future market share and growth potential. 

3. Acquiring a Profitable, Lean Operation:

The Target: A highly profitable MSP or MSSP with excellent operational efficiency, strong EBITDA margins, and a lean cost structure.

Why a Buyer Would Purchase: To immediately boost their overall profitability, benefit from economies of scale post-acquisition, and potentially replicate efficient processes across their other business units. They’re buying immediate profit and operational excellence.

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