How to Sell Your Business in Nigeria: A Step-by-Step Guide

Selling a Nigerian business is harder than it looks. There's no public M&A market for SMEs, very few brokers focus on businesses under ₦500m enterprise value, and most "buyers" who reach out on WhatsApp aren't real. Yet legitimate exits happen every month — to local PE, family offices, strategic competitors, and occasionally to international acquirers. This is the realistic step-by-step.

Step 1 — Decide what you're actually selling

• Share sale — buyer acquires the company itself, including liabilities. Cleaner for founders, riskier for buyers.
• Asset sale — buyer cherry-picks specific assets (brand, equipment, customer contracts). Common where the company has skeletons.
• Partial sale / recapitalisation — you sell 30–70% and stay on. Increasingly common in Nigerian SME deals.

Step 2 — Get a realistic valuation

Three valuation methods dominate Nigerian SME transactions:

1. EBITDA multiple — typical SME multiples in Nigeria range from 2×–5× sustainable EBITDA. Sectors like fintech and healthcare command higher; trading and retail lower.
2. Revenue multiple — common in SaaS and subscription businesses; usually 1×–3× ARR.
3. Asset-based — sensible for asset-heavy businesses (manufacturing, real estate) or distressed sales.

Avoid "vibes valuations". A buyer with capital will run the numbers, and an inflated ask will burn your credibility.

Step 3 — Prepare the information memorandum (IM)

A standard IM for a Nigerian SME includes:

• Business overview, history, ownership structure
• 3–5 years of audited financials (or management accounts)
• Customer concentration analysis
• Key contracts, licences, IP, real estate
• Team structure and key-person dependencies
• Growth thesis and 18–36 month forecast
• The ask: structure, price range, founder involvement post-sale

Step 4 — Find buyers

Five real buyer pools for Nigerian SMEs:

1. Strategic competitors — your direct rivals are often the best-priced buyers because of synergies.
2. Adjacent businesses — companies that want your customer base or distribution.
3. Local PE / family offices — Verod, ACA, CardinalStone, and a long tail of unbranded family vehicles.
4. International acquirers — typically interested in tech, fintech, healthcare and consumer.
5. Search funds and high-net-worth individuals looking for owner-operator opportunities.

Fundwey lets verified Nigerian business owners signal "open to acquisition" privately, then matches you with pre-qualified buyers without exposing your identity until you both agree.

Step 5 — Negotiate the term sheet

Watch for: earn-out structures (how much of the price is contingent), non-compete duration, key-person clauses, working-capital adjustments, indemnity caps and basket thresholds.

Step 6 — Due diligence and legals

Buyers will run financial, legal, tax, commercial and (increasingly) ESG diligence. Engage a Nigerian-qualified M&A lawyer and a tax adviser before diligence begins. Expect 60–120 days from term sheet to completion for a mid-market SME.

Step 7 — Tax implications

Capital Gains Tax in Nigeria is currently 10% on share disposals. Other taxes may apply depending on the asset/share structure, FIRS positions, and any FX gains. Stamp duties on share transfers and on definitive agreements also bite. Always plan tax structure with a qualified Nigerian tax adviser before signing — restructuring after the fact is brutally expensive.

Common pitfalls

• Talking to one buyer at a time — kills price discovery.
• No NDA before sharing data — exposes you to competitive harm.
• Earn-outs structured around metrics the buyer controls.
• Leaving CAC filings, tax returns or NDPR registration out of date — eaten alive in diligence.

Looking to quietly explore selling? List your business on Fundwey with the "open to acquisition" flag and reach verified Nigerian buyers anonymously.