Commentary, analysis, and observations from the advisory desk — on transactions, valuations, and the businesses that define Nigeria's mid-market.
There is a gap in the Nigerian financial advisory market that almost nobody talks about. Not because it is small. Because it is so obvious that the people inside it have stopped seeing it.
At the top of the market sit the large investment banks — Stanbic IBTC, Chapel Hill Denham, Vetiva Capital Management, and their peers. They are serious, well-resourced, and credible. They also work almost exclusively on large-cap transactions: listed companies, capital market instruments, institutional mandates, and large corporate clients with the balance sheets to command their attention.
At the bottom sits a fragmented mass of small accounting firms, generic consultants, and self-styled business advisors offering financial advice without transaction execution capability. Many are competent at what they do. Almost none of them have the depth to advise on a serious acquisition, capital raise, or business exit.
Between these two worlds sits Nigeria's mid-market — businesses with annual revenues between ₦500 million and ₦20 billion. These are not small businesses. They are substantial enterprises with real operations, real employees, real customers, and real complexity.
Some of them are considering their first serious capital raise. Others are thinking about bringing in a partner, acquiring a competitor, or eventually exiting the business they have spent a decade building. Many have reached a size where the informal structures that got them here are no longer sufficient for where they want to go.
These are consequential decisions. The difference between getting them right and getting them wrong is not marginal. It is the difference between a transaction that creates generational wealth and one that leaves value on the table — or destroys it entirely.
"These businesses are too small for the large investment banks and too sophisticated for the generic consultants. They are making the most consequential decisions of their business lives with nobody credible in their corner."
A founder approaching a private equity firm for the first time without preparation. Financials that are real but not investor-ready. A valuation expectation built on revenue rather than earnings. No information memorandum, no governance documentation, no clear transaction narrative. The investor passes — not because the business is bad, but because it is not ready.
An acquirer making an offer on a target business without independent due diligence. The numbers look right on the surface. The underlying issues — customer concentration, off-balance-sheet liabilities, governance problems — are not visible until after the transaction closes. By then, the price paid is the wrong price.
A business owner receiving an unsolicited acquisition approach. No advisor to validate whether the offer is fair. No process to create competitive tension. No independent counsel on the terms, the structure, or the governance implications of the deal. They take the first offer because they do not know there is another option.
These are not hypothetical situations. They are the reality of how transactions happen — or fail to happen — across Nigeria's mid-market every day.
The gap is not a problem looking for a solution. It is a market looking for a participant. The businesses are there. The transactions are happening. The capital is looking for deployment. What is missing is a credible, independent advisory firm that serves this specific market — not as a secondary focus, but as its entire reason for existing.
That is what Sawyerr & Co. was built to be. Not the biggest advisory firm in Nigeria. The most credible one for this specific segment. The firm that mid-market business owners and serious investors turn to when the deal actually matters.
The gap is real. The opportunity is significant. And we have chosen it deliberately.
The most common and most expensive mistake in Nigerian business transactions is not bad valuation. It is not the wrong investors, or the wrong structure, or even bad timing. It is going to market before you are ready.
Most Nigerian founders approach investors and acquirers with a business that is real, successful, and genuinely valuable — but not transaction-ready. And in any serious transaction process, being almost ready is the same as not being ready at all.
When a serious investor looks at a business, they are not just looking at the revenue number. They are running a rapid assessment of transaction risk — asking, systematically, how much work will it take to get this business to a place where we can actually close a deal.
They look at the financials first. Are they audited? Are they consistent? Do they tell a coherent story about the business? If the answer to any of these questions is no, the investor's risk assessment immediately increases. They start discounting the valuation before the conversation has really begun.
They look at governance next. Does a real board exist? Are shareholder agreements in place? Are the regulatory filings current? Is there documentation of how decisions get made? Informal governance — which describes most Nigerian mid-market businesses — is not a dealbreaker. But it is work that has to be done before closing, and investors price the cost of that work into the terms they offer.
They look at customer concentration. If 60% of revenue comes from two clients, the business is not worth what the revenue number implies. The concentration is a risk that investors see immediately and founders almost never mention.
"Preparation is not a formality. It is the difference between a transaction that closes on your terms and one that never should have started."
The consequences of going to market before you are ready are more serious than most founders realise. They are not just the immediate embarrassment of a difficult meeting. They are structural and long-lasting.
First, you lose credibility with investors you will want to come back to. Once an investor has seen a messy, unprepared business, it takes significant evidence of change to get a second serious look. That first impression is hard to undo.
Second, you anchor the conversation at the wrong valuation. When an investor sees problems in a business, they do not price those problems as adjustable. They price them as risk — and risk is discounted, not negotiated. The valuation you get in an unprepared process is almost always lower than what you would have achieved with six months of proper preparation.
Third, you hand information to people who are now better equipped to negotiate against you. Due diligence is a one-way information flow. Once you have opened your books to a counterparty, they know things about your business that you can no longer take back — regardless of whether the deal closes.
Transaction readiness is not a checklist. It is a process of making your business legible to the market — presenting what already exists in a form that reduces investor uncertainty and supports the valuation you are asking for.
It starts with the financials. Three years of audited or properly prepared management accounts, reviewed for consistency, restated where necessary, and presented in investor-ready format. Not just cleaned up — narrated. The numbers should tell a story that an investor can follow.
It continues with governance. Shareholder agreements formalised. Board documentation in order. Regulatory compliance verified. Not because these things change the underlying business — they do not — but because they remove friction from the transaction process and signal that you are serious about the deal.
It includes an independent valuation. Not the number you hope the market will pay. The number that the market will actually support, based on your financials, your comparables, and your growth trajectory. Knowing that number — really knowing it — changes every conversation you have with investors.
And it culminates in an information memorandum. A professional document that tells your business story in the language that investors understand. Not a brochure. Not a pitch deck. A document that gives a serious investor everything they need to make a preliminary investment decision.
The instinct of most founders is to find the investor first and prepare the business second. The right sequence is the reverse. Prepare first. Then go to market. You will have better conversations, better terms, and a significantly higher probability of closing.
The preparation is not the obstacle. It is the protection. The stress of getting your business ready for a transaction is incomparably smaller than the stress of a transaction that goes wrong because you were not ready for it.
Most Nigerian business owners do not know what their business is worth. Not approximately. Not within a range. They have a number in their head — and that number is almost always wrong.
This is not a criticism. It is an observation. Valuation is a discipline that most founders have never been taught, and the informal ways that valuations get discussed in Nigeria — multiples of revenue, comparison to a competitor someone heard about, the amount the owner needs to retire — are not methods. They are guesses dressed as numbers.
The number most founders carry is built on one of three foundations, none of which are how investors value businesses.
The first is revenue. "My business does ₦500 million in revenue, so it must be worth at least ₦1 billion." Revenue is an output. What investors value is the free cash flow that revenue generates after costs, taxes, and reinvestment. A business with ₦500 million in revenue and ₦10 million in profit is worth a fraction of a business with ₦500 million in revenue and ₦100 million in profit. The revenue number tells an investor almost nothing about value.
The second is effort. "I have put ten years into this business. It has to be worth what my ten years are worth." Investors do not buy the effort. They buy the earnings stream. Your history of sacrifice and commitment — which is real and significant — does not appear in a discounted cash flow analysis.
The third is need. "I need ₦200 million to retire comfortably." What you need from a transaction is irrelevant to what a buyer will pay. The market pays what the business can justify. No more.
"The most dangerous number in a transaction is the valuation expectation that has never been tested against market reality. It poisons every conversation before it starts."
Professional valuation uses multiple methodologies, each of which approaches the question of value from a different direction. A credible valuation reconciles these approaches into a range that the market will support.
The discounted cash flow analysis asks: what is the present value of the free cash flows this business will generate over the next five to ten years, discounted back at a rate that reflects the risk of those cash flows not materialising? This is the most theoretically rigorous method. It is also the most sensitive to assumptions — particularly the growth rate and the discount rate.
The comparable company analysis asks: what are similar businesses trading at in the market, and what does that imply for this business? In a market as illiquid as Nigeria's mid-market, finding true comparables is difficult. But it is not impossible, and it provides a sanity check on the DCF results.
The precedent transaction analysis asks: what have similar businesses sold for in actual transactions, and what multiple of earnings or revenue did those transactions imply? This is particularly valuable because it reflects what buyers have actually paid — not what they theoretically should pay.
The reconciliation of these three approaches, weighted for the specific characteristics of your business, produces a defensible valuation range. Not a single number — a range, with a central case and supporting analysis.
A formal, methodology-led valuation does three things that informal valuation cannot.
First, it grounds your expectations in market reality. If you expect ₦2 billion and the analysis supports ₦800 million, it is better to know that before you are sitting across from an investor who has done their own analysis. Entering a transaction with an unrealistic valuation expectation is not just uncomfortable — it is expensive. Deals collapse over valuation gaps that could have been anticipated and addressed in preparation.
Second, it gives you a number you can defend. When an investor challenges your valuation — and they will — you are not defending a feeling. You are defending a methodology. That is a fundamentally different conversation. It shifts the discussion from "what do you think your business is worth" to "here is what the analysis shows, and here is why."
Third, it identifies your value drivers. A good valuation analysis does not just produce a number. It tells you which aspects of your business are driving value and which are discounting it. That intelligence is actionable. The six months before a transaction is exactly when you should be investing in the things that move the number — not guessing at what investors care about.
The answer is before any transaction conversation begins. Not during. Not after an investor has already formed their own view of what your business is worth. Before.
A valuation done at the right time — before you go to market — is a tool. A valuation done after the market has already formed its view is a defence. The first is much more valuable than the second.
The cost of a formal business valuation is a fraction of the value it protects in any serious transaction. It is the most consistently underinvested-in step in the Nigerian mid-market transaction process. And it is the step where founders most frequently leave money on the table.
Know your number. Before anyone else tries to tell you what it is.