The clean deal that closed faster because nothing was hiding
A search fund was evaluating an established IT managed services provider serving small and mid-sized businesses. .4M EBITDA, asking price — a 5.8x multiple at the high end of the MSP comp range. Two competing bidders were also in the data room. The buyer needed to decide quickly whether to match a higher offer or walk. The risk in MSPs is well known: tribal knowledge in technicians' heads, undocumented client environments, and key-person dependencies that surface only after closing.
Recurring revenue is real. Client retention is strong. But MSPs are operationally messy — proceed cautiously, expect surprises.
This business runs on documented systems, not on people. Every claim the seller made can be reproduced by the buyer's team on day one. The operational risk discount you'd normally apply doesn't belong here.
All five lenses returned green. More importantly, the evidence base behind the scores was unusually deep: governed contracts, ticketing system timestamps, documented runbooks, and a leadership team that had already operated the business through one prior key-person departure.
Every client environment was documented with current access credentials, network diagrams, and recovery procedures. The ticketing system carried full traceability from client request to technician resolution to billable invoice. Four senior technicians had cross-coverage on every client account, with documented escalation paths. The seller had built the business as if it were already someone else's — which, in DVTA terms, meant it was transferable.
DVTA returned a PROCEED signal with 91% confidence and no required conditions.
The buyer moved decisively. They closed at .6M — modestly below asking, but without the operational holdbacks and earnouts that competing bidders were demanding. The seller accepted the cleaner structure over the marginally higher gross numbers from other suitors. Time from DVTA delivery to signed LOI: 11 days.
The buyer's first 90-day operational review confirmed the assessment: revenue, margins, and client retention tracked as projected. No surprises.
A clean DVTA result is not just a green light. It is a negotiating instrument. In a competitive process, the buyer who can quantify the absence of risk moves faster, structures cleaner deals, and wins assets that less-prepared bidders walk away from.