What happens to my MSP after Evergreen acquires it?

Evergreen maintains a decentralized model where your company keeps its name, team, processes, and technology stack. Leadership retains full autonomy to run the business as long as agreed-upon metrics are met. The company provides support through Lyra Technology Group for vendor buying power, talent acquisition, and sales team development, but does not impose operational changes or force integration.

How should I prepare my MSP for sale to maximize valuation?

Build a growth engine by hiring dedicated sales resources to reduce founder dependency. Structure your P&L to clearly separate recurring revenue (subscriptions), reoccurring revenue (repeat services), and one-off revenue. Reduce customer concentration below 10% of total revenue. Clean up personal expenses run through the business. These fundamentals demonstrate sustainable growth potential and reduce risk for acquirers.

What should I prioritize when evaluating acquisition offers?

Focus on deal structure over headline valuation. Examine cash at closing versus earnout terms, verify the buyer has secured financing before entering diligence, and understand the buyer's operating model (decentralized versus platform consolidation). A lower cash offer with favorable terms often delivers more value than a higher number with extended earnouts or integration requirements.

Preparing Your MSP for M&A: Deal Structure & Valuation

Name: Preparing Your MSP for M&A: Deal Structure & Valuation
Uploaded: 2026-05-12T20:28:02-04:00
Duration: 24 min 43 s
Description: In this episode of M&A Unpacked, Mike is joined by Craig Fulton, Advisor: Brand, M&A, and Community at Evergreen Services Group. During this interview, Craig shares: - Who Evergreen is and what the difference is between them and other buyers - His advi...

Kaseya

05/12/2026

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TL;DR

Evergreen operates as a permanent holding company (not traditional PE), acquiring MSPs to hold forever while maintaining decentralized operations, preserving company names, teams, and culture
MSPs preparing for sale should prioritize building a growth engine with dedicated sales resources, clean up P&L structure to separate revenue types, and reduce customer concentration below 10%
Deal structure matters more than valuation multiples—focus on cash at closing, earnout terms, and verify buyer financing before entering lengthy diligence processes
Hiring your first salesperson is critical even if they don't work out; implement systems and processes for sales teams just like service delivery to enable management and accountability
Evergreen has grown to 70+ MSP acquisitions globally with regional CEO structure, offering sellers options from immediate exit to leadership roles in the larger organization

Evergreen's Holding Company Model

Craig Fulton explains how Evergreen Services Group operates as a holding company rather than a traditional private equity firm, inspired by Berkshire Hathaway's approach. The company acquires MSPs to hold them permanently, never selling businesses after acquisition. Evergreen maintains a decentralized model that preserves company names, people, processes, and technology stacks. This approach differs fundamentally from platform plays that pursue roll-ups and synergies. The company has expanded globally with over 70 MSP acquisitions across North America, the UK, Australia, and New Zealand, organized under regional CEOs who work directly with leadership teams to drive organic growth while maintaining operational autonomy.

Preparing Your MSP for Sale

Fulton emphasizes that building a growth engine is critical for maximizing valuation, particularly establishing founder-independent sales capabilities. He advises MSPs to invest in dedicated sales resources even if the first hire doesn't work out, as this demonstrates sustainable growth potential to acquirers. Financial preparation includes structuring the P&L to clearly separate recurring revenue (subscriptions), reoccurring revenue (repeat professional services), and one-off revenue. Reducing customer concentration below 10% of total revenue significantly improves deal attractiveness. Clean books matter—personal expenses run through the business should be separated before entering the market. Fulton compares this preparation to staging a house for sale: the fundamentals must be sound and presentation matters.

Deal Structure Over Valuation

The most critical advice Fulton offers is to prioritize deal structure over headline valuation numbers. MSP owners often focus on multiples without examining cash at closing, earnout terms, and buyer financing. He warns that deals can collapse months into diligence if buyers lack secured financing. The structure determines actual value—a lower cash offer with favorable terms often beats a higher number with extended earnouts or contingencies. Fulton recommends MSPs use resources like MSPvaluations.com for preliminary estimates and emphasizes that every business is unique, requiring individualized valuation rather than industry-standard multiples. Understanding the buyer's operating model—whether decentralized like Evergreen or a platform consolidation play—is essential for evaluating cultural fit and post-acquisition experience.

Chapters

0:00 - Introduction
1:25 - Evergreen's Holding Company Model
4:16 - Preparing Your MSP for Sale
7:00 - Hiring Your First Salesperson
10:35 - Sales Process and Systems
12:00 - Culture and Post-Acquisition Life
15:00 - Global Expansion and Regional Structure
19:00 - Deal Structure Advice
21:48 - MSP Valuation Guidance
23:28 - Contact Information and Resources

Key Quotes

1:51 "Evergreen is the permanent home for businesses and leaders. What we mean there is we buy businesses to hold them forever. We never sell a business."
4:42 "Something that's really attractive, having a growth engine. Do you have a sales team? Is this founder led sales? If your business is still founder led sales, my advice would be invest in a salesperson now."
7:49 "Just hire your first salesperson, put it out there, find someone with the understanding that you're probably going to fire that person within six to nine months. It's just going to happen."
10:04 "Most companies I run into add maybe two new customers a year. It'd be great if you can get more than that."
19:34 "I think what became of me is Craig Fulton, even before Evergreen, was deal structure. I heard a lot of people running around like, oh, man, my business is worth this. And then when they get into a deal, it's like, wait, but what's this deal structure like? ..."
20:18 "Does the buyer have financing? I've seen deals where people have gone into it and they're in diligence for months and then the buyer comes along and says, oh, couldn't get financing deals over."

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