Inside the Numbers: What Hundreds of IT Business Sales Tell Us About Value in 2025

If you’ve spent any time scrolling BizBuySell lately, you’ve probably noticed the same thing I did. IT companies of every size are listed across the country with all kinds of price tags, promising “recurring revenue,” “cloud-based systems,” or “AI potential.” Some of those listings close for eye-catching prices, but most sell for something far more realistic.

To see what’s really happening, I analyzed hundreds of closed IT and software business transactions listed on BizBuySell. The results tell a story that every owner and buyer should hear.

The Real IT Business Market

Across hundreds of sales nationwide, the average IT business changed hands for a little over $2 million. That may sound impressive, but averages can fool you. When you dig into the data, the majority of deals cluster in a much tighter range.

Nearly two out of every three IT businesses sold for 2 to 3 times annual cash flow. That is the real heartbeat of the market. High-value SaaS companies and large managed service providers occasionally reach 5x or more, but those are the exception. The reality is that most IT businesses are bought and sold at practical, cash-flow-driven multiples.

Where the Money Really Is

The typical IT business in the data set earns around $2 million in revenue and produces roughly $470,000 in annual cash flow. The overall average multiple hovers near 4x, but the majority of deals fall below that.

Here’s how it breaks down by company size:

Why the 2–3x Zone Dominates

The 2 to 3x range is not a weakness. It is a reflection of how most IT businesses operate. Buyers and lenders both price for sustainability and risk, not hype.

Common factors that keep valuations in this range include:

• Customer concentration or churn risk

• Heavy owner involvement

• Project-based work instead of recurring contracts

• Lender requirements for short repayment timelines

For buyers, these deals can be strong investments that pay for themselves within a few years. For sellers, the numbers highlight why recurring revenue, documented systems, and client diversification matter so much before going to market.

Who’s Buying

The strongest activity continues in California, Texas, Florida, and North Carolina. These four states make up more than half of the closed deals in the analysis. Buyers are drawn to them for their business-friendly climates, established tech sectors, and growing regional economies.

Private equity groups remain active, especially in managed service rollups. Corporate buyers pursue niche SaaS tools and AI-driven platforms. Individual buyers, often exiting corporate jobs, are entering the market for smaller, profitable IT firms that can be operated or expanded quickly.

If you’re looking for a hotbed of IT transactions, start with:

• California – SaaS and cybersecurity powerhouses

• Texas – Data, VoIP, and managed services hubs

• Florida – Fast-growing SaaS and cloud infrastructure deals

• North Carolina – Strong MSP market with loyal regional clients

Together, these four states accounted for over half of all IT business sales nationwide.

How to Beat the 2–3x Ceiling

If you own an IT company and want to sell above the 3x range, you’ll need to show buyers that your business runs without you, retains customers automatically, and grows predictably. The best performers in this market share several traits:

1. Recurring revenue from contracts with renewal terms

2. Documented processes that allow delegation

3. Diverse client base with no single client over 10 percent of revenue

4. Clean, current financials

5. Scalable systems and a clear growth plan

These are the companies that consistently sell at 4x, 5x, or higher.

Positioning Your Business for the Best Exit

If your business is solid, recurring, and not entirely dependent on you, it’s worth real money.  If it’s not, we can help you get it there.

At EDGE Business Advisors, we help owners maximize value before they sell—and help buyers find deals that actually make sense.

Because whether you’re selling or buying, the smartest play is understanding what the market actually pays for IT businesses, not what the headlines say.

Want to know what your IT company is worth?

Schedule a confidential consultation at buyselledge.com or call 404-940-5748.

Article Sources: Source: BizBuySell.com Database