The exception
We have written about several trades where the published valuation record fails: sources that disagree about the number, about the measure, about which convention the market uses, and about which segment ranks highest. Managed services is the one we checked where it holds together.
Two independent publishers report on the same measure and their ranges overlap substantially. Our estimator marks the vertical as supported, and leads with what managed service providers actually sold for, taken from the transaction source rather than from the advisory one. Both publishers are named in the record beneath it. That is worth showing, because a standard that only ever returns bad news is not a standard, it is a posture.
It is also worth reading carefully, because agreement between publishers turns out to answer a smaller question than it appears to.
What the two publishers say
The Deal Sheet, published 14 March 2026, reports IT services and managed services at 3.0x to 5.5x owner earnings. It scopes owner earnings multiples to businesses under $5 million in revenue where the owner actively works in the business, and states its data is compiled from the BizBuySell Insight Report, the IBBA Market Pulse, Peercomps transaction data, and conversations with brokers and advisors.
CT Acquisitions, verified 1 July 2026, reports 3.0x to 7.0x owner earnings for providers under $1 million of revenue, and describes that range as dependent on recurring revenue share.
Both use owner earnings. The ranges overlap across their full narrower width, which clears the threshold we use for treating two sources as describing the same population. So the estimator reports supported evidence rather than a conflict.
Then look inside the range
CT Acquisitions publishes something on the same page that is more useful than either headline range, and it undoes any comfort the agreement might have offered.
For providers under $1 million in revenue, it reports that those with recurring monthly revenue below half of total revenue traded at a median of approximately 3.4x owner earnings across the 2024 calendar year. For providers of the same size with recurring revenue at 70 percent or higher, the median was approximately 5.4x.
Same trade. Same revenue band. The median moves by roughly two turns, and the only variable separating them is how much of the revenue is genuinely contracted.
That is the answer the industry-level range cannot give you. Two publishers agreeing that the trade sits between 3x and 5.5x is true and nearly useless to a specific owner, because the width of that band is not market noise. It is a description of two different kinds of business wearing the same label.
Recurring revenue is a claim, and claims get tested
If the number that matters is the share of revenue under a genuine recurring agreement, then the question for an owner is not what the market pays. It is whether they can prove their own recurring revenue share to somebody who does not take their word for it.
That distinction is harder than it sounds. Work that repeats is not the same as work that is contracted. A client who has called every quarter for six years produces predictable revenue and no contractual obligation to continue. A signed agreement that both parties have quietly ignored for two years is contracted and not real. Between those sit legacy terms nobody has looked at, agreements that auto renewed into conditions the business no longer honours, and accounts billed at rates the paperwork does not support.
A buyer separates these. The owner who has already separated them arrives with an asset. The owner who has not arrives with an assertion, and assertions get discounted.
How independent are these two sources, honestly
One caution about our own finding, because it would be inconsistent to apply a standard to publishers and not to ourselves.
The Deal Sheet describes itself as compiling from the BizBuySell Insight Report, the IBBA Market Pulse, and Peercomps. CT Acquisitions publishes its own transaction observations and also references industry datasets. Neither is a primary transaction register that we can inspect.
We treat them as independent because they are different organisations reaching their figures by different routes, which is the rule we apply everywhere. But independence by origin is a weaker condition than two separate transaction datasets, and a reader is entitled to know that the supported label here rests on that weaker condition. It is the honest reading of our own best case.
What a platform buyer examines
Diligence concentrates almost entirely on proving the recurring base and on what the agreements actually oblige.
- Contracted recurring revenue, separated from work that merely repeats
- Agreement terms on length, renewal, termination, and assignment on a change of control
- Service level commitments, and performance against them, including any credits owed
- Clients still on legacy terms the business would not offer today
- Revenue concentration among the largest accounts
- Licence and vendor agreements, and whether they transfer
- Security attestations and certifications, and what was actually assessed and when
- Whether escalations and client environment knowledge depend on the owner
What to do about it
The work here is specific and it is available now. Establish, from the agreements themselves rather than from the billing system, which revenue is contracted, on what terms, and for how long. Then check whether what you bill matches what you signed, and whether the agreements you are counting are ones you would want a buyer to read.
That exercise routinely finds three things: agreements that expired without anyone noticing, clients billed on terms that no document supports, and recurring revenue that turns out to be habit rather than obligation. Each is cheaper to fix before a buyer finds it.
Verelume reads contracts, financials, and operating records and reports what the record supports, where documents conflict, and where a claim has no documentation behind it. For a managed services business, that is a direct answer to the one question that moves the multiple.