What Acquirers Look for in Small IT Services Companies: Insights from Recent Deals

If you’re running a small Salesforce consulting firm in Pune, or maybe a boutique DevOps shop in Austin, you’ve probably asked yourself:

“Would anyone buy my company? And if they did, what exactly would they be paying for?”

The answer isn’t just revenue, or headcount, or the fact that you have a nice office space in a tech park. Over the past year, as we have spoken with dozens of strategic buyers in the US, UK, and India, one thing has become crystal clear: acquirers don’t just buy IT services companies, they buy future potential.

Here’s what that means:-

1. A Client Base That Speaks for Itself

No buyer wants to inherit a headache. When an acquirer evaluates your company, the first thing they look at is your clients.
Who are they? Enterprise logos, such as Adobe, Pfizer, or Infosys, make buyers lean in. But even smaller, niche clients matter if they’re sticky and aligned with a growth sector (think mid-sized SaaS companies, or e-commerce brands scaling globally).

How long have they stayed? Client tenure is a proxy for trust. A client that’s been with you for 5+ years is worth far more than three new ones acquired last quarter.

Are they concentrated or diversified? If one client is 70% of your revenue, that’s a red flag. Buyers prefer a portfolio where no single client holds the entire company hostage.

Pro tip for founders: Map out your top clients, their history, and recurring revenue contribution. Buyers love that kind of clarity.

2. Capabilities That Are Not Easily Replaced

Here’s a hard truth: “generic” IT services companies rarely command a premium.

If a firm is simply offering staff augmentation or “we-do-everything” development, they’re competing in a crowded field with razor-thin margins.
Buyers pay more for specialisation:

• A Microsoft Dynamics 365 integrator with deep industry expertise in healthcare.
• A ServiceNow partner with certified consultants and ready-to-go accelerators.
• An AI/ML advisory boutique working on niche use cases in BFSI.

Why? Because those capabilities aren’t built overnight. They require certifications, case studies, and credibility, which is exactly what acquirers are looking to “buy instead of build.”

3. Recurring and Predictable Revenue

The days of “project-to-project” IT shops are numbered—at least when it comes to attractive M&A targets.

Buyers ask:
What % of revenue is recurring?
How predictable is cash flow in the next 2 years?

Managed services contracts, annual support retainers, and subscription-based advisory packages all increase valuation multiples because they provide stability.
A company making $5M in revenue from one-off web builds isn’t as attractive as one making $3.5M from ongoing managed services. Buyers see the latter as less risky and easier to forecast.

4. Leadership and Team That Can Scale

Here’s something most founders underestimate: acquirers aren’t just buying your company—they’re buying your team. If the founder is the rainmaker, the delivery lead, and the HR head, that’s a problem. Buyers worry about what happens the day after you exit.

Instead, buyers love to see:

• A second line of leadership—project managers, tech leads, client relationship managers.
• Low attrition—a stable team means a smoother post-acquisition transition.
• Culture fit—especially for cross-border deals. A US acquirer buying an Indian company will look at whether teams can collaborate seamlessly.

5. Clean Operations and Transparent Financials

Even if you have great clients, skills, and a strong team, messy books can kill a deal.

Buyers will dig deep into:

• Accounting hygiene— Are invoices, tax filings, and payroll consistent and well-documented?
• Debt and liabilities— Are there hidden loans, unpaid vendor bills, or legal disputes?
• Margins— Healthy EBITDA margins reflect strong operational discipline

6. Alignment with Their Strategy

This one is often overlooked, but it might be the most important factor of all.

Strategic buyers aren’t just looking at what you are today—they’re asking:

• Does this acquisition help us enter a new market?
• Does it add a new capability we don’t have?
• Does it deepen our relationship with key clients?

For example:

• A UK-based MSP looking to enter India might pay a premium for a local firm with strong enterprise clients.
• A US cloud services company wanting to expand into Salesforce might buy a certified boutique—even if it’s smaller—because it fits their roadmap.

To summarize

When we speak with founders who want to sell, many focus on their revenue numbers. But buyers aren’t just buying numbers—they’re buying clients, capabilities, contracts, culture, and clarity.

If you’re on the sell-side, think about:

1. Are my books clean?
2. Do I have a team beyond me?
3. Am I positioned as a “generalist” or a “specialist”?

If you’re on the buy-side, ask:

1. Does this company fill a gap in our offering?
2. Are their clients, team, and operations ready for integration?