Selling a business in Lagos is a different experience than exits in North America or Europe. The buyer pool is smaller, deal timelines are longer, and regulatory requirements add layers that can catch unprepared sellers off guard. But Lagos also offers genuine demand from pan-African corporates, private equity funds expanding across the continent, and strategic buyers looking to consolidate in high-growth sectors. If you plan carefully, you can run a competitive process and close at a strong multiple. Here is what you need to know.
How Nigerian Business Valuation Works
Valuation multiples in Nigeria are generally lower than in Western markets when denominated in USD, but they reflect real currency risk, market liquidity, and the cost of capital in a high-inflation environment. EBITDA multiples for profitable Nigerian SMEs in consumer, retail, and services typically range from 3x to 6x, while technology businesses with recurring revenue and documented unit economics can command 6x to 12x revenue or higher depending on growth trajectory.
Buyers in Lagos discount for informal revenue that cannot be documented, underfunded pension liabilities, unresolved tax arrears, and businesses that are operationally dependent on the owner. The single most impactful thing you can do to raise your valuation before going to market is clean up your books, clear any FIRS obligations, and demonstrate that the business runs without you in the day-to-day.
Platforms like BizBuySell can give you a baseline sense of how businesses in your category are priced internationally, which is useful context when benchmarking what local buyers may offer against global comparable transactions.
Capital Gains Tax on Business Sales in Nigeria
Understanding your tax position before you sell is essential. In Nigeria, gains from the disposal of chargeable assets including shares and business assets are subject to Capital Gains Tax (CGT) at a flat rate of 10% under the Capital Gains Tax Act.
CGT is assessed on the gain (proceeds minus cost basis and allowable expenses). If you are selling shares, the gain is the sale price minus your original cost of acquisition and any transaction-related costs. If you are selling assets, each asset class is assessed separately. Real property gains may also attract Lagos State CGT or consent fees depending on how land is transferred. Engaging a tax advisor from KPMG Nigeria, PwC Nigeria, or a reputable mid-tier firm before signing an LOI will save you from surprises at closing. Our guide to tax and financial services in Lagos covers the key firms and considerations for business owners.
CAMA 2020 and What It Means for Sellers
The Companies and Allied Matters Act (CAMA) 2020 modernized Nigeria’s corporate law framework significantly. Key provisions relevant to business sellers include: streamlined share transfer procedures, updated rules on mergers and acquisitions including requirements for shareholder approval thresholds, enhanced minority shareholder protections that a buyer’s lawyers will scrutinize, and new provisions governing the deregistration of dormant subsidiaries.
CAMA 2020 also introduced Single Member Companies, making it easier for sole founders to structure their equity before a sale process. If your company was incorporated under the old CAMA 1990, confirm with your lawyer that your statutory books and shareholding structure comply with the updated requirements before going to market. Buyers’ legal teams will flag any CAMA compliance gaps during due diligence.
Finding Strategic Buyers in Lagos
The Lagos buyer landscape has multiple tiers. Understanding which type of buyer fits your business determines how you position the sale.
Pan-African corporates are among the most active acquirers in Lagos. Companies like Dangote Group, Zenith Bank, MTN Nigeria, Shoprite, and others regularly acquire businesses that extend their product range, geographic reach, or supply chain. These buyers move slowly (12 to 24 months is not unusual) but can pay strategic premiums for businesses that solve a specific problem for them.
Private equity funds focused on West Africa and Nigeria are a strong fit for profitable businesses in the NGN 500 million to NGN 5 billion range. Key PE firms active in Lagos include Helios Investment Partners (one of the largest Africa-focused PE firms), TLcom Capital (tech and growth-stage focus), and Verod Capital Management (mid-market Nigeria and Ghana). These firms have dedicated deal teams and move more predictably than strategic buyers, though they typically require a clear exit pathway of their own within 5 to 7 years.
Endeavor Nigeria is a network worth engaging early in your process. Endeavor supports high-impact entrepreneurs in Nigeria and its network includes many of the most active founders, executives, and investors in Lagos. Introductions through Endeavor can connect you with both strategic and financial buyers who understand the Nigerian market and value businesses appropriately.
Preparing for Sale: Get Your Documents in Order
A serious buyer will expect a well-organized data room. At minimum, prepare: three to five years of audited financial statements, FIRS Tax Clearance Certificates for the same period, CAC certificates and statutory books (register of members, directors, allotments), all material contracts, employee records and payroll history, property titles or lease agreements, any regulatory licenses and their expiry dates, and a management information presentation that tells the story of the business.
Sellers who go to market without organized documentation lose months to back-and-forth requests and signal to buyers that the business may have other organizational problems. Invest 30 to 60 days in getting your house in order before your first serious buyer conversation. Working with a good commercial lawyer is also important at this stage. Our directory of business lawyers in Lagos includes firms with M&A and corporate transaction experience.
The Nigerian M&A Timeline: Expect 6 to 18 Months
Sellers who have exited businesses in the US or UK are often surprised by how long Nigerian deals take. A realistic timeline from first approach to close is 6 to 18 months for a mid-market transaction. The main drivers of this extended timeline are: regulatory approval from SEC Nigeria (30 to 90 days), FIRS and LIRS tax clearance processing, CAC filing backlogs, and the pace of decision-making within large Nigerian corporate buyers who typically require multiple committee approvals.
PE-backed deals can move faster than strategic deals, particularly if the fund has Nigerian counsel already engaged and deal completion conditions are clearly defined. But even with aligned parties, buyers conducting thorough due diligence in an environment with informal recordkeeping will slow down the process.
Plan your personal and operational transition around this timeline. Running a sale process for 12 months while also managing a business is demanding. Build a management team capable of operating the business while you are distracted by deal negotiations, because buyers will use any operational deterioration during the sale process as leverage on price.
Repatriation of Sale Proceeds
For foreign-owned businesses, repatriating proceeds of a sale requires a Certificate of Capital Importation (CCI) from the Central Bank of Nigeria (CBN), which must have been obtained when the original investment was made. If you did not obtain a CCI at the time of investment, this is a serious problem to address with your lawyer well before going to market. Nigerian banks will not process international wire transfers of sale proceeds without a valid CCI or CBN approval.
Start Planning Your Exit
Exiting a business in Lagos at a strong multiple requires preparation, patience, and the right professional team. Clean financials, a documented management structure, clear regulatory compliance, and early engagement with the right buyer profile will put you in the strongest possible negotiating position. The Lagos M&A market is maturing fast, and well-prepared sellers are finding competitive processes that would have been unimaginable a decade ago.
Planning a business exit or thinking about your next Lagos venture? Join Hustlers Library free for access to M&A insights, founder networks, and guides built for serious entrepreneurs operating in West Africa.
Skip the Broker: Sell Directly to a Buyer
If you are weighing your options, it is worth knowing that broker-free exits are increasingly common — especially for businesses in the $200K to $5M revenue range where traditional brokers charge 8-12% and listings can sit for 12-18 months.
Hustler’s Library Acquisitions acquires profitable main street businesses directly — service companies, retail, professional practices, e-commerce, and more. No broker, no public listing, complete confidentiality. If you are also selling a digital asset (domain, content site, SaaS, or social account), visit our Digital Acquisitions page.
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