Why owners choose a private sale
According to AGBI, private M&A accounted for about USD 15.7 billion, or 83% of exit value in MENA, in the first half of 2026, as the IPO market stalled. PwC described the Middle East IPO market as largely closed from February 2026. When the public window is shut, a negotiated sale is often the only way to get liquidity on a predictable timeline, and it does not depend on the mood of the market on a single pricing day.
A private sale also suits businesses that do not want public disclosure, have a concentrated customer base or a cyclical result that would be hard to explain to public investors, or whose owners want to exit fully rather than stay as a controlling shareholder of a listed company.
Who the buyers are
- Strategic buyers: companies in the same or a neighbouring industry. They can pay for synergies, but they usually want control and will integrate the business.
- Private equity funds: they buy majority or significant minority stakes, work to a holding period and plan their own exit, often through a later IPO or a sale to another buyer.
- Family offices and sovereign or quasi-sovereign funds: in the Gulf they invest directly, often as long-term minority partners.
- Infrastructure and credit funds for asset-heavy businesses, sometimes with a mix of equity and debt.
The two exit routes are linked. EY counted 103 private equity backed IPOs in 2025, about 8% of deals but 36% of global IPO proceeds. A fund that buys a stake today may be the shareholder that takes the company public later.
Private sale and IPO compared
| Point | Sale to a strategic buyer or fund | IPO |
|---|---|---|
| Control | Can be sold entirely; a minority sale keeps control but adds investor consent rights | Owners usually keep control, the public holds the free float |
| Valuation | Negotiated with one buyer or in an auction, may include a control premium | Set by the market at pricing, often with an IPO discount |
| Cash for owners | Most of it at closing, part may be deferred or tied to results | Often limited at the IPO, more after the lock-up through later sales |
| Timeline | Shorter in many cases, depends on due diligence and approvals | Usually 12 to 24 months of preparation, by EY and PwC summaries |
| Disclosure | To the buyer only, under a confidentiality agreement | Public prospectus and ongoing reporting |
| After the deal | Contractual obligations: warranties, non-compete, earn-out | Listing rules, governance code, investor relations |
| Market risk | Lower, but the deal can fail in negotiation | High: the window may close before pricing |
How the process runs
- Preparation: audited accounts, a clean group structure, a vendor due diligence report where useful, and a clear equity story.
- Approach: a short teaser, then an information memorandum to buyers who sign a non-disclosure agreement.
- Indicative offers, a short list and access to a data room for due diligence.
- Negotiation of the share purchase agreement and, for a minority deal, the shareholders' agreement.
- Signing, then regulatory and merger control approvals where needed, and closing.
Terms that decide the real price
- Price mechanism: a locked box fixed on a past balance sheet or completion accounts adjusted at closing.
- Deferred and contingent payments, such as an earn-out tied to future results, which shift risk back to the seller.
- Warranties and indemnities, their caps and time limits, and whether warranty insurance is used.
- For a minority stake: board seats, veto rights, transfer restrictions, tag-along and drag-along, and the investor's exit right, which may require an IPO or a sale within a set period.
- Non-compete and management retention obligations for the selling owners.
When a sale fits better than an IPO
A private sale fits when owners want certainty and speed more than the potential upside of public pricing, when the business benefits from a strategic partner, or when the cost of public reporting outweighs the value of a listing. An IPO fits better when owners want to keep control, raise capital repeatedly and use listed shares for acquisitions. Eurasia Consulting Group publishes this material for educational purposes.