Private equity firms are moving into IT asset disposition (ITAD), reshaping a sector long run on hardware resale into a recurring-service model, industry participants said.

Financial sponsors are treating the fragmented, founder-owned corner of IT services as a platform-building opportunity, much as they did with managed service providers a decade ago.

Recognize took a majority stake in Sprout in January 2025, and Sage Sustainable Electronics, majority owned by Closed Loop Partners, acquired Cascade Asset Management the following month. CTL, backed by Columbia River Partners, bought 3R Technology in April 2025, and Tailwind Capital became the majority investor in DMD Systems Recovery last September. In April 2026, SER Capital Partners’ Paladin EnviroTech platform acquired Ireland’s ICT. All terms were undisclosed.

Providers that once relied on buying and selling used equipment, tying revenue to hardware prices, have shifted toward recurring contracts for lifecycle management, decommissioning, data destruction, and compliance.

“The gold standard is a pure-services business, with customers paying recurring fees for asset management and disposal rather than one living off resale profits,” said Michael Rosholt, senior vice president at IT-focused advisory firm martinwolf. Those businesses draw the strongest buyer interest and the highest multiples, he said.

Hyperscalers and large enterprises are refreshing hardware faster as AI workloads expand, pushing more used equipment into the secondary market. High-value chips now hold their value long enough to support profitable resale. Rosholt estimated that AI server equipment can retain roughly 65% to 70% of its value after three years, letting providers refurbish GPU racks for buyers that need computing power but not the newest generation.

The end of Microsoft’s support for Windows 10 in October 2025 is expected to drive a corporate PC replacement wave into 2026 and 2027, feeding more retired hardware to the platforms the sponsors are now assembling, said Brett Robinson, managing director at FMI Capital Advisors.

Cyber-insurance carriers increasingly require audited, end-of-life data sanitization as a condition of coverage, and escalating data-privacy litigation has pushed serialized data destruction and chain-of-custody documentation to the board level, forcing mid-market companies away from informal disposal practices and toward professional providers, Robinson said.

Source: Mergermarket

What buyers want

New entrants want a platform with the scale and management team to anchor a buy-and-build, while existing platforms and strategics chase add-ons, Robinson said.

“Acquirers have zero interest in a simple broker who just buys and sells used electronics,” Robinson said. Because disposal is a non-core but recurring function for corporate clients, an embedded provider is hard to displace, which is what makes the customer relationships worth paying for. Corporate clients are also going with national platforms that can offer indemnification and audit-grade reporting, he added, favoring scaled providers over founder-run shops.

Several strategic players have made acquisitions in the search for scale too. Celestica acquired NCS Global Services for USD 39.6m in 2024, one of the few disclosed prices in a sector where deal terms rarely surface. Sumitomo took a minority stake in GreenTek Solutions in July. Iron Mountain has built a disposition arm by acquiring ITRenew, Regency Technologies, Ireland’s Wisetek, and Australia’s ACT Logistics, a run of deals that helped lift its asset lifecycle management revenue 63% last year, to USD 633m.

What earns a premium

Valuations have climbed over the past 18 months as buyer competition has intensified, and the sector still looks relatively inexpensive next to others riding the AI build-out, Robinson said. Rosholt said multiples are up across the board, not only for businesses that have already shifted to recurring revenue.

“Investors now see ITAD as a critical service supporting the digital economy, not a waste-management task,” said Eric Ingebretsen, president of Americas and chief commercial officer at IT lifecycle management company SK tes. Data security, compliance and sustainability have become board-level concerns, he noted. Predictable, contracted revenue draws the most competition, though the private nature of the deals keeps exact multiples out of view, he added.

Targets with clean, integrated data systems command a premium, Robinson said. Many founder-owned shops have strong customer relationships but struggle operationally because their systems are siloed and data is difficult to extract, he added.

Robinson and Ingebretsen said exposure to data-center and AI infrastructure attracts the strongest buyer interest. Rosholt noted that intense competition in the data-center ITAD market is pushing some providers toward steadier end-user segments such as corporate devices and education, where one-to-one programs and PC upgrades are shortening refresh cycles.

The most attractive models are asset-light. The provider collects retired equipment, sorts it and pays the client a rebate on what it recovers, keeping a percentage rather than owning the hardware – and the inventory risk that comes with it.

A sharp drop in data-center hardware values in 2022 exposed operators that owned inventory, Rosholt noted, leading to more structured deals. Since then, even inventory-heavy operators have tightened their discipline about what they buy and pay, leaving Rosholt less worried about inventory risk today and more focused on providers’ room to “land and expand” services inside existing accounts.

Where recovery values are uncertain, buyers still reach for structure – earn-outs tied to future recovery, noted Ingebretsen, and short-term commodity hedging on larger, longer-dated projects, added Rahul Advani, CEO and managing partner of SER Capital Partners.

What may come to market

Robinson is tracking more than 300 smaller, founder-owned businesses he sees as potential acquisition candidates over the next five years.

Onshore demand to recover critical minerals from end-of-life hardware is adding another pull, said Advani, who called it a widening opportunity for the sector.

“This is a customer-service business with greater needs than many industry players previously considered,” Advani said.

Once a provider is embedded and executing well, Robinson added, “it is a very sticky business that is incredibly difficult to displace.”