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PE Playbook: Evergreen Services Group
State of Play
For those in the know, managed IT service providers (“MSPs”) have been a hot roll-up market among the PE community. There’s even a PE firm with a sole strategy dedicated to MSPs.
And rightfully so. As we will cover, MSPs have a great business model (recurring, high retention), flexible labor model (remote, offshore), and most importantly, an abundantly fragmented market (over 20,000 companies).
Leading the charge is Evergreen Services Group–an Alpine Investors backed holding company that recently hit a major milestone of its 100th MSP acquisition and surpassing $1 billion in revenue. Let’s dive in.
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Company Overview
First, what do MSPs do?
MSPs act as outsourced IT departments, remotely managing IT infrastructure, networks, applications, and security on an ongoing basis. Rather than one-off projects, MSPs provide continuous, subscription-based IT services, typically under service contracts that guarantee certain performance and support metrics. Their services are delivered at a predictable recurring fee, which is often cheaper than handling IT in-house.
In essence, MSPs allow small and mid-sized businesses (SMBs) to access enterprise-grade IT support and expertise on a pay-as-you-go basis.