Succession & Strategy in the Channel: should you be planning for M&A? Mar 24, 2026 Every IT service provider (ITSP) will one day face a decision point - buy, sell or transition - and the time to prepare is long before that moment arrives. In the session Succession & Strategy: Planning Exits, Mergers and Long-Term Value in the IT Channel, at the GTIA North America Community & Councils Forum, moderator Hank Dallam, CEO of NetGain Technologies, guided a candid conversation with M&A leaders Sarah Ahmed and Vicky Bruns of Evergreen Services Group, and Brent Williams, CEO of The AME Group. What emerged was a clear call for ITSP and MSP owners to begin preparing (in advance) for the future of their business, whatever path they eventually choose. A Market Full of Momentum and Misconceptions According to Bruns, today's ITSP owners tend to fall into two distinct groups: Those looking to sell and those looking to acquire. "Some owners are overwhelmed by the pace of change in our space and wonder if now is the moment to exit," she said. "Others want to buy because they see acquisition as the path to hitting their next growth target." Private equity's increasing interest in SMB-focused IT providers is accelerating this dynamic. As Bruns noted, when major players like Microsoft publicly state that SMB technology spend has surpassed enterprise spend, "people start to take notice." But even as deal activity rises, many owners are still fixated on the wrong benchmarks. Ahmed emphasized that valuation multiples - often the first number owners ask about - are one of the most misunderstood metrics in the industry. "Multiples tell you how much money is coming into the space, not what your business is worth," she explained. "If you're only focused on multiples, you're comparing apples to oranges. What matters is the real dollar outcome and the operational story behind it." Williams agreed, adding that many buyers are motivated by looming investments in AI, automation and security. "For a lot of owners, those investments are daunting," he said. "M&A becomes a strategic way to get there faster." What Really Drives Valuation? Organic Growth and Repeatability Throughout the discussion, the experts returned to one central message: Organic growth is the single strongest indicator of long-term value. In fact, Ahmed described it as the backbone of any high-quality ITSP. "A well-built sales engine - one that isn't dependent on the founder - is consistently one of the biggest value drivers we see," she said. "It's not just the team; it's the structure, the talk tracks, the ICP clarity and the CRM that proves your process works." Other valuation boosters the panel highlighted included: * Strong recurring revenue * Diverse vertical presence, especially in segments currently attracting private equity, such as dental practices and wealth management * Long-term client contracts that demonstrate trust * A leadership team capable of running the business without the owner * Disciplined pricing and cost management Williams emphasized that buyers look not just for growth, but for sustainable growth. "If the founder is the growth engine, that's a risk, not a value driver," he said. "We want to see a process and a model that can succeed the founder." Customer concentration risks also continue to be a major red flag. "Even if your numbers look great, overreliance on one or two clients can erode your valuation instantly," Bruns added. Preparing for a Sale Takes Years, Not Months If there was one message the room heard repeatedly, it was this: Effective succession and M&A planning takes a minimum of 24 to 36 months. Ahmed offered a simple, yet powerful exercise for owners. "Ask your No. 2 and your management team: Can you run and grow this business for 90 days without me? If the answer is no, that's where your work begins." The panelists encouraged owners to assess: * Leadership depth * Operational maturity * Data cleanliness * Client contract structures * Organizational accountability * Employee retention Williams noted that due diligence often reveals where processes fall short. "We look closely at KPIs and who truly owns them. Accountability tells us more about the business than any pitch deck." Even the emotional side of ownership came up. Dallam asked whether MSPs are structured to let go, and one attendee cut right to the truth. "Most MSPs want to be in charge. They can't get away from it. They love the chaos." But as Dallam reminded the audience, "The exit will happen eventually. The question is how prepared you are when it does." Buying? Selling? Growing? Your Best Strategy Is Optionality Not every owner wants an exit. Some want to hit $10 million in revenue. Some want to build a legacy and pass the business down. Some want to launch a new venture and need the capital to do it. And some simply want fewer sleepless nights. "There's no single path that's right for everyone," one attendee noted. "Some people want the quarterly checks, others want to build something for the next generation." But regardless of the path, the panel agreed that the best strategy is to build options. Dallam summarized it well. "You may think you know your timeline, but you don't get to choose when the perfect buyer shows up," he said. "The earlier you start, the more choices you have." Bruns encouraged owners to start conversations with potential buyers long before they're ready to sell. "Knowledge is power," she said. "Get the practice swings in now so you're ready for prime time when the moment comes." And when owners do enter those conversations, she offered simple advice. "Don't put on your sales hat. Let your P&L and your data speak for itself - and make sure you're asking the buyer tough questions too." The Takeaway: Preparing Today Buys You Freedom Tomorrow Every panelist emphasized this point: You don't have to want to sell to start preparing like you will. Because whether your future includes acquisition, growth, legacy transfer or eventual exit, the steps to prepare are the same - and the businesses that begin early will have: * More options * Better valuations * Smoother transitions * Less owner dependency * Greater long-term stability As Ahmed put it, "A successful sale isn't predicated on your personal timing. The market doesn't wait for you." Which means the smartest thing any ITSP can do today... is start preparing for tomorrow. Lean on the GTIA community to help you plan your next step. GTIA members, access a library of resources on the Member Portal. Not a member? 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Evergreen adds TransDigm Co-COO, Patrick Murphy, to it's advisory board. Road to 50x: Evergreen adds TransDigm Co-COO, Patrick Murphy, to it's advisory board. A commitment to building enduring businesses sits at the core of Evergreen's ethos. A viewpoint that is rooted in long-term thinking, decentralized operations and the belief that durable growth is created through empowered leadership, inverse to typical Private Equity. Patrick Murphy has adopted and breathed the same ethos for over a decade at TransDigm. Evergreen is thrilled to welcome Patrick on to his first advisory board and to bring his track record of deep operational expertise to its businesses. This partnership is an exciting endorsement of the growth that Evergreen will continue to build upon. About Patrick and Why he Chose Evergreen Patrick Murphy is the Co-Chief Operating Officer at TransDigm, a ~$70B market-cap aerospace components company and one of the most profitable and operationally disciplined businesses in the aerospace sector. TransDigm generates around $9B in annual revenue and is deeply respected for their industry leading margins and consistent growth. Since going public, TransDigm has generated 25%+ annual total shareholder returns over the past 15 years, driven by its disciplined acquisitions, decentralized operating model and unparalleled value creation playbook. Nick Howley, Founder and Executive Chairman of TransDigm explores the foundations that TransDigm set to achieve these remarkable results on Will Thorndike's, an Evergreen Board Member, podcast 50x. "Evergreen is redefining what it means to be a buyer in the technology services market, through their commitment to empowering leaders and driving sustainable growth over the long term. I'm excited to bring my experience in leading decentralized, high-growth organizations to provide strategic guidance as the team navigates rapid growth with precision and purpose." Said Patrick Murphy Patrick was promoted to Co-COO in August 2025 following an 11-year tenure in leadership at TransDigm. This included six years as Executive Vice President overseeing a portfolio of subsidiaries and five years as President of HarcoSemco. Earlier in his career, he led various industrial and technology businesses at Danaher. Establishing a Market Leading Value Creation Playbook at Evergreen As an advisor, Patrick will not join Evergreen's day-to-day operations but lend his perspective to advise its leaders on further bolstering its value creation playbook and scaling its decentralized operating model. Jeff Totten, Evergreen CEO, remarks "My Co-Founder, Ramsey and I have admired TransDigm as a leading decentralized serial acquirer since our early days of building Evergreen. TransDigm has a simple and effective playbook for value creation that we intend to build upon at Evergreen. We also admire how TransDigm has promoted decentralization as a large, publicly-traded company. From our first meeting with Patrick, we knew that he is someone who we both look up to and can learn from. We are privileged to have him in our corner."