Maximising Buyer Confidence

Buying or investing in a business in the GCC

At Hadef & Partners, our ‘Maximising Buyer Confidence’ initiative is aimed at steering Buyers of business in the GCC through a number of key transactional stages where they might better mitigate potential exposure and risk.

There are different potential reasons for contemplating the purchase of shares or assets in an existing company or business. We have worked with many Buyers, from a variety of international jurisdictions, with each having their own motive.

Whatever the commercial intent, for any investment or purchase, preparedness is always key, and the principle of ‘caveat emptor’ (let the buyer beware) always applies.

Purchasing a business – Four common types of business purchase

There are a number of different transaction areas in which a Buyer might forcibly exert some influence, for example, during due diligence and its effect on a target’s valuation, in the negotiation of conditions precedent to completion, by way of a company restructuring, or through the negotiation of warranties in the transaction agreements.

We have considered just a few points to note in the context of the following four types of business purchase below:

  1. Third party target company;
     
  2. Buy-out of existing franchisee/distributor/agent/joint venture partner/investment;
     
  3. Private equity/Investor seller; and
     
  4. Existing management team/new management team (MBO or MBI) buyout of target company.

Although other types of transactions do of course exist, and some Buyers may be a hybrid of these four common types, we find that the above categories generally apply to most private business sale transactions in the GCC. 

For more detailed information, please download our Maximising Buyer Confidence pack using the link below.

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