By Bill Anderson, Senior Valuation Advisor & RICS Associate, Assetica — 2024-10-04
Acquiring a running business can be a strategic move to enhance your investment portfolio, diversify income streams, or venture into a new sector.
Acquiring an established business in the UAE offers immediate cash flow, an existing customer base, and a proven operating model. Unlike starting from scratch, you inherit trained staff, supplier relationships, and brand recognition. For investors targeting Dubai's growing mid-market, it is often the fastest route to meaningful revenue.
Business valuations for acquisitions in the UAE typically use three primary methods: Discounted Cash Flow (DCF) analysis projects future earnings and discounts them to present value. Market comparables benchmark your target against similar businesses sold in the UAE and GCC. Asset-based valuation assesses net tangible assets, relevant where property or equipment is the primary value driver. For most SME acquisitions in Dubai, a combination of DCF and market comparables provides the most defensible price.
Before completing any acquisition in Dubai, buyers should verify: three to five years of audited financial statements; trade licence validity and transferability; all lease and supplier contracts; employee contracts and gratuity obligations; pending litigation or regulatory issues; tax compliance under UAE corporate tax; and confirmation that all licences and permits can be transferred to new ownership.
How do I verify the financial statements of a business I am buying in Dubai?
Request three to five years of audited financial statements. Cross-reference revenue with bank statements, VAT returns, and point-of-sale records. Assetica's due diligence process independently verifies all financial claims before you commit to a price.
Can a business licence be transferred to a new owner in the UAE?
Yes, in most cases UAE trade licences can be transferred to a new owner. The process involves DED or the relevant free zone authority, and may require regulatory approvals depending on the business activity. Assetica advises on licence transferability as part of acquisition due diligence.
What is a fair EBITDA multiple for buying a business in Dubai?
UAE EBITDA multiples typically range from 3x to 7x depending on the sector, growth rate, customer concentration, and quality of earnings. Retail and F&B businesses trade at the lower end. Professional services and technology businesses with recurring revenue can achieve 5x to 8x or higher.