Your IT Services Firm Is Mispriced. By 3x.

Same math. Every meeting. Every sector.

Most IT services firms trade at 5x EBITDA. The top quartile trades at 15x. Same engineers. Same delivery work. Different wrapper.

I built two PE practices — at HCLTech and LTTS — and sat through years of sponsor pitches, portco scorings, and deal teardowns across enterprise software, industrial tech, and healthcare services, from the lower mid-market through large-cap. The sectors changed. The multiple pattern didn't.

The math compounds on packaging — not on TAM, not on headcount, not on years of operating history.

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A $50M services practice. Two radically different prices.

T&M / staff aug. 3x–7x EV/EBITDA — roughly $25M–$50M of enterprise value on $50M of revenue.

Productized / managed. 10x–15x EV/EBITDA — roughly $75M–$150M of enterprise value on the same $50M of revenue.

Same engineers. Same delivery work. The packaging is what gets repriced.

Sources: Aventis Advisors (600+ IT services M&A transactions, 2015–2025); Houlihan Lokey IT Services Market Update (Q4 2025); Breakwater M&A (2026). EV assumes ~15–20% EBITDA margins; the productized range sits at the top quartile.

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Four structural markers. Anything less is marketing.

01 Fixed scope. The same scope every time. Not "scoped per engagement."

02 Fixed deliverable. One named deliverable per offer. Not "outcomes vary by client."

03 Codified methodology. A runbook a senior operator can execute against. Not the founder's head.

04 One named outcome, owned. One outcome, one buyer segment, one entry point.

The test: can a new senior hire sell, scope, and deliver this in 90 days — without the founder in the room?

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Four sponsor-brain reasons. Not opinion.

01 Capacity ceiling. Revenue scales linearly with senior headcount. The math doesn't compound.

02 Founder dependency. The firm is the founder. At exit, the next owner is buying a person.

03 No methodology transfer. New senior hires take 12–18 months to become productive. There is no playbook.

04 Exit narrative collapse. "High-quality custom work for sophisticated clients" describes a craft shop.

The discount isn't arbitrary. It's a forecast.

Four mirrored reasons. Each undoes a T&M failure mode.

01 Predictable revenue. Same SKU, repeated. Forecast accuracy compounds.

02 Transferable methodology. New senior hires productive in 90 days, not 18 months.

03 Scales below the senior person. Mid-level operators deliver. The linear ceiling breaks.

04 The exit narrative writes itself. "We own [outcome] for [segment]" — an IC repeats it in thirty seconds.

The premium isn't sentiment. It's discounted cash flow with lower risk.

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Nine to twelve months. Not 90 days.

Saying no to custom. The lowest-margin work walks. That is the point.

Codification costs utilization. Roughly six months of senior effort — the utilization line dips before it recovers.

Nine to twelve months for one offer. Month 3, first sale. Month 9, third sale. Month 12, deal four closes without the founder. That window applies to MVP productization of one offer; firm-level repositioning across multiple lines is a longer arc.

The first 90 days do the repositioning — offer productized, narrative live, engine in market. The next nine months prove it works.

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One offer. Three sales. Without the founder.

Pick one service line. Productize one offer within it. Do not try to productize the firm.

One named outcome, fixed scope, fixed deliverable — sold three times to test the methodology. One sale is anecdote. Two is coincidence. Three is a signal.

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The second engagement closes without the founder in the room.

Hard to fake. Hard to skip. The single operational fact that re-rates how the firm is read inside the sponsor's head.

Operational signal first. Financial signal follows. The repricing follows the perception — and the perception follows the proof.