By Bill Anderson, Senior Valuation Advisor & RICS Associate, Assetica — 2026-06-05
Buyers in the UAE quietly apply seven discounts before making an offer. Most owners never see them coming. Here is what they are and how to defend against each one.
The biggest and most common discount. If the business cannot run for three months without you, the buyer is buying a job, not a business. A heavily owner-dependent business may trade at half the multiple of an equivalent business with a functioning second tier of management, and buyers protect themselves further with earn-outs and long handover periods. The defence is to start removing yourself at least two years before any sale.
Buyers get nervous when any single customer exceeds 15 to 20 per cent of revenue, and the discount deepens sharply above that. Shares in a private UAE company also carry a discount for lack of marketability: niche licences, complicated shareholding and free zone transfer restrictions all widen it. Buyers then rebuild your earnings from scratch, inserting an arm's length owner salary, normalising family payroll and stripping one-off gains. The rebuilt figure is almost always lower, and the multiple is applied to it.
If working capital is below the agreed normal level at completion, the difference comes off the price dirham for dirham. Smaller businesses carry lower multiples because they carry more risk, and crossing size thresholds changes which buyers can look at you at all. Finally, earn-outs, deferred payments and holdbacks transfer risk back to the seller: a lower all-cash offer frequently beats a higher structured one.
Every discount is the buyer pricing a risk the owner has lived with so long they stopped seeing it. Unlike market conditions or sector multiples, these discounts are largely within your control. The owners who get the best exits started dismantling them two or three years before they ever spoke to a buyer.
Why do buyers offer less than my business is worth?
Buyers apply a routine set of discounts for risks the owner often no longer sees: owner dependence, customer concentration, marketability, earnings quality, working capital shortfalls, size and deal structure. Together these commonly explain offers 30 to 50 per cent below an owner's expected number.
What is the biggest discount buyers apply to UAE businesses?
Owner dependence. If the business cannot run for three months without the owner, it may trade at half the multiple of an equivalent business with a real management team, and more of the price gets pushed into earn-outs.
When do customer concentration discounts start?
As a rough rule used widely in deal work, buyers start getting nervous when any single customer exceeds 15 to 20 per cent of revenue, and the discount deepens sharply above that.
How do I defend against buyer discounts?
Start two to three years before a sale: reduce owner dependence, diversify customers, clean the books and run audited accounts, manage working capital to a normal level, and get an independent valuation showing which discounts currently apply and what each is costing you.