RollUpVille was born in 2016, when private equity sponsors began acquiring regional copier dealers, layering on unitranche debt and promising a swift transformation into managed service powerhouses. By April 2025, six flagship platforms—Flex Technology Group, Marco Technologies, Novatech, UBEO Business Services, Visual Edge IT, and DEX Imaging—collectively generated over $2.5 billion in revenue. Yet none has achieved a successful exit. Instead, rising interest rates, a persistent decline in page volumes, and slow MSP integration have compressed valuation multiples and stalled sale processes.
Page volumes continue to fall at roughly 4 – 6 % per year, eroding the core cash engine that underwrites MSP roll-outs . At the same time, unitranche coupons tied to SOFR + 450–550 bps have spiked by about 300 bps since 2022, adding $8–12 million in annual interest expense for a typical $300 million platform deal . Buyers now underwrite hybrid copier/MSP assets at 5–7× EBITDA, far below the 9–11× multiples sponsors modeled during the 2016-19 acquisition wave .
Each platform faces its own challenges. Flex Technology Group (Flexpoint Ford, 2016) reported $434 million in revenue for FY 2025, with MSPs contributing only 15 % of gross profit. A paused auction in late 2022 revealed buyer interest at 6–7× EBITDA, below the sponsor’s expectations . Marco Technologies (Clearlake Capital recap, 2022) stands out with $561 million revenue and a 45 % MSP mix, positioning it for 9–10× EBITDA valuations and a likely strategic sale in 2027 . Novatech (Perpetual Capital, Sept 2024) generates an estimated $250 million in revenue with 26 % from MSP and aims for 45 % by 2028 to reenter sponsor-to-sponsor markets at 7–8× EBITDA .
Sentinel Capital’s UBEO Business Services, with $750 million in revenue and 18 % MSP mix, added $120 million of debt at SOFR + 500 bps in 2024 to fund tuck-ins . Visual Edge IT (Oval Partners, 2016) posted $350 million in revenue and 22 % MSP growth but still runs print and tech as separate P&Ls after a $40 million debt raise for MSP acquisitions . DEX Imaging (Gamut Capital, 2024) trails with under 15 % MSP on $400 million revenue and must double its IT headcount by 2026 or risk a 5× exit multiple .
Sector-wide M&A volume in IT services fell 20 % in Q1 2024, while deal value plunged 44 % . Roughly 28 % of U.S. PE portfolios are now beyond their normal 3–7 year hold periods, and buyers demand at least 70 % recurring revenue to engage . Moody’s warns that companies with SOFR + 500 bps coupons face material refinancing risk if base rates remain above 6 % into 2026.
Looking to FY 2025-2028, three scenarios emerge. If the Fed cuts rates twice in 2025, borrowing costs could fall 50–75 bps, reopening sponsor-to-sponsor exits for highest-mix MSP assets in late 2026. If rates stay elevated, sponsors may refinance again in 2027, deferring exits to 2028 or beyond at ever-higher cost. A third “break-up” scenario sees strategics acquiring pure MSP arms at 8–9× EBITDA, while leaving print portfolios in lower-multiple shells.
Key metrics to watch include MSP share of gross margin, net page declines versus service cost inflation, and debt-service coverage at a 6 % base rate. As the refinancing clock ticks louder, only those platforms that can accelerate recurring revenue growth without sacrificing cash flow will secure a graceful off-ramp in RollUpVille.
— Grayson Patrick Trent | greg report contributor
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