MSP M&A remained resilient in Q2 2026 with 111 transactions, up 9% quarter-over-quarter. But the more important story underneath the headline number: buyers are no longer paying for AI claims, they're paying for AI proof. And that's splitting the market into clear valuation winners and losers.
Highlights:
- 111 M&A transactions in Q2 2026, up 9% QoQ, led by Cognizant's $600MM acquisition of Astreya
- IT Services dominated deal flow at 95% of volume, and strategic buyers remained the primary consolidators; the top 10 acquirers each closed four or more deals since mid-2024
- AI adoption is now the underwriting basis for acquisitions, not a pitch line. Buyers pay for MSPs that have embedded AI into service delivery, not those merely selling it. Sub-$1.5M EBITDA MSPs trade at 5-7x; scaled platforms above $15M EBITDA with strong recurring revenue command 16-18x
- The global MSP market is on track to hit $850B by 2034, up from $350B in 2025, a 10.4% CAGR driven by rising IT complexity and cybersecurity demand
Sam Levy, Partner at Drake Star, notes:
"We're seeing a clear split between MSPs that have actually put AI to work in their operations and those just selling AI as a service line. That distinction is now driving both diligence and pricing."
Download the full Q2 2026 MSP Market Update for the complete breakdown of deal activity, top consolidators, and more:
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