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.
