IT Services Roll-Up Strategies

A comprehensive analysis of value creation through acquisition multiples arbitrage

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    Unlocking Value in IT Services Roll-Ups

    This analysis explores the economic upside of roll-up strategies in the IT Services sector, highlighting how strategic acquisitions can drive valuation gains.
Based on 29 transactions across Australia, Singapore, Europe, and North America (2021–2025), the findings reveal:

    Valuation arbitrage: Bolt-ons acquired at 4–6x EBITDA, platforms exiting at 9–13x

    Premiums for specialization: Higher multiples for capabilities in data/AI, cybersecurity, and platform partnerships

    Recurring revenue & growth: Key drivers of valuation uplift

    Geographic variations: Clear differences in multiples by region

    Success hinges on choosing the right targets, understanding local valuation dynamics, and structuring deals to maximize returns.

    Neil Bourne

    A MESSAGE FROM

    Neil Bourne

    (Managing Principal, Eaton Square)

    In today’s rapidly evolving IT services landscape, business owners face critical decisions about growth strategies and potential exits.

    This analysis examines how strategic acquisitions and consolidation can create substantial value through multiple arbitrage.

    The numbers show the relationship between scale and exit multiples compounds. For IT services owners plotting their growth journey, understanding how revenue-scale milestones impact valuation provides crucial guidance for long-term strategic planning. Drawing on analysis of transactions across Australian, Singaporean, European, and North American markets, this report identifies clear patterns in how business model characteristics, geographic presence, specialized capabilities, and deal structures impact achievable multiples.

    The findings suggest that IT business owners should focus on several key value drivers:

    • Building recurring revenue streams and specialized capabilities
    • Developing strategic vendor partnerships and government client relationships
    • Pursuing geographic expansion strategies that enhance market positioning
    • Structuring acquisitions to optimize effective multiples and integration success.

    Whether you’re considering immediate growth through acquisition, positioning for a future exit, or simply maximizing the value of your IT services business, this analysis provides practical insights to inform your strategic decision-making.

    The report offers a framework for evaluating potential acquisition targets, understanding market positioning, and implementing value-enhancing initiatives that can significantly impact your company’s long-term valuation.

    Neil Bourne
    Managing Principal, Eaton Square
    [email protected]