Published July 7, 2026 · Updated August 21, 2026
Pedro Oliveira, Founder & Principal, Renova Strategy
Technology services businesses are among the most misunderstood companies at valuation time. Owners tend to anchor on revenue. Buyers anchor on something entirely different: the quality and durability of that revenue.
Our team has been on every side of this specific transaction. We have built technology services businesses, sold them, and acquired, grew, and sold a technology services company as buyers ourselves. What follows is how these businesses are actually priced, not how owners wish they were priced.
Two technology services companies can have identical revenue and profit and be worth dramatically different amounts. The difference is almost always revenue composition.
Contracted recurring revenue (managed agreements, retainers, subscriptions) is the most valuable dollar a services business earns. It is predictable, it survives the owner’s departure, and a buyer can model it with confidence.
Repeat but non-contracted revenue (clients who come back, but on no obligation) is worth less. It depends on relationships, often the owner’s relationships.
Project revenue is worth the least per dollar. It has to be re-won every time. A business that is 80 percent project work is effectively a sales operation that has to rebuild its book every year, and buyers price it that way.
The practical implication: converting project clients to contracts in the years before a sale is one of the highest-return moves an owner can make. Every dollar you move from project to contract is a dollar the buyer values at a higher multiple.
Client concentration. If one client is more than 15 to 20 percent of revenue, expect questions. If one client is 40 percent, expect deal structure that protects the buyer, or a lower price.
Contract terms and assignability. Can your agreements transfer to a new owner without client consent? Auto-renewal language, term length, and termination clauses all get read carefully in diligence.
Stack and process documentation. A business that runs on documented, standardized tooling transfers cleanly. A business that runs on tribal knowledge in the owner’s head does not.
Team depth. Who holds the client relationships? Who holds the certifications? If the answer to both is “the owner,” the buyer is not buying a business, they are buying a job with turnover risk.
Growth trajectory. Flat is survivable. Declining recurring revenue is a serious problem, because it undermines the one thing the buyer was paying a premium for.
Technology services businesses generally trade on a multiple of SDE at the smaller end and EBITDA as they grow. The range is wide, and the spread is explained almost entirely by the factors above. A heavily contracted, well-documented, low-concentration business earns a multiple that can be double what a project-heavy, owner-dependent peer commands, at the same profit level.
That spread is the opportunity. Most of what separates the top of the range from the bottom is fixable in 12 to 36 months of deliberate preparation.
Own a technology services business and wondering where you fall in that range? Our team has bought and sold in this exact market. An initial consultation is free.