M&A Deals Creating Real-Life Money Pits for MSPs?

Content by: David Walter from Resonant Technology Partners

In the 1986 comedy The Money Pit, Tom Hanks’ character famously screams in frustration as his dream home literally collapses around him. “Here lies Walter Fielding. He bought a house, and it killed him.” It’s a line played for laughs—but in today’s Managed Service Provider (MSP) world, it’s starting to feel a little too real. As M&A activity surges across the IT support industry, some firms are discovering that what looked like a dream deal is turning into a real-life money pit. The question is: are these cracks new—or were they always there?

The Cracks Were Always There

When an MSP is small or mid-sized, internal issues like poor hiring or disorganized processes can be hidden or patched over. But once that company starts acquiring others, those “small” problems scale into major liabilities. We’ve seen it firsthand in San Antonio: our firm has picked up clients from three different MSPs that were acquired by larger, out-of-town firms. Why? Because the cracks started to show. Post-acquisition, these companies struggled with inconsistent service, communication breakdowns, and staff turnover. The root cause? A combination of bad hires and chaotic internal structures that couldn’t handle the complexity of scaling. What once worked for a 20-person team doesn’t hold up when you’re managing five offices and hundreds of clients. As one client told us, “It felt like they were building the plane while flying it—and we were the passengers.”

Founders Exit, Clients Get Burned

One of the most overlooked consequences of M&A deals is the exit of the original founder. Often, the founder is the cultural glue and strategic brain behind the MSP’s success. When they’re pushed out—or choose to leave—everything changes. Clients who were used to a personal, responsive relationship suddenly find themselves dealing with a faceless, process-heavy machine. Worse, these clients are often forced into new contracts with higher prices and stricter terms. One client described it as a “shotgun wedding”—they didn’t ask for a new provider, but they’re stuck with one. The result? Frustration, distrust, and a growing desire to find a provider who actually listens. Just like in The Money Pit, where every repair leads to another disaster, these clients feel like they’re constantly paying more for less.

Big Box IT: When Growth Outpaces Quality

This isn’t just a problem with M&A. Even organically grown MSPs can fall into the same trap when they scale too fast. One of our recent prospects told us their current provider—a large, national IT firm—lost track of their account entirely. The salesperson was gone, the support team was unresponsive, and their issues were falling through the cracks. This is what happens when growth outpaces quality. Without the right people and processes in place, even the best intentions collapse under pressure. It’s not just about size—it’s about structure, culture, and execution. As The Money Pit reminds us, “Two weeks” can turn into two years if you don’t know what you’re doing.

Conclusion: Don’t Let Your IT Become a Real-Life Money Pit

The lesson here is clear: whether you’re buying, selling, or scaling, you can’t afford to ignore the foundation. M&A deals aren’t inherently bad—but they need to be strategic, thoughtful, and client-focused. If you’re a business owner evaluating your IT provider, ask yourself: has service improved or declined since the acquisition? Are you still getting the attention and expertise you need? And if you’re an MSP considering growth, remember: the cracks you ignore today will become the sinkholes of tomorrow. Don’t let your IT become a real-life Money Pit. Choose a provider that’s built to last—one that values people, process, and performance over flash and fast deals. Because in IT, just like in homeownership, it’s what’s behind the walls that really matters.