A valuation is not a single figure pulled from an income statement. It is an independent professional opinion built on a stated methodology and testable assumptions, and it goes on to be used in negotiations, credit decisions or statutory procedures. The gap between an accredited report and an internal estimate is the gap between a document that survives scrutiny and one that does not.
The five triggers
- Sale or purchase: establishing a defensible price range before negotiation begins.
- Mergers and acquisitions: valuing both sides, structuring the deal and allocating stakes.
- A partner entering or exiting: pricing the stake neutrally reduces the risk of dispute.
- Conversion to a joint stock company or an IPO: a statutory requirement in the listing file.
- Obtaining financing: banks and funds require an independent valuation of collateral and assets.
What makes a report acceptable?
Regulators and banks look at three things: who issued the report (a valuer licensed by the Saudi Authority for Accredited Valuers), which methodology was applied (in line with International Valuation Standards), and whether the assumptions are documented with disclosed sources. Missing any one of the three exposes the report to rejection or rework.
A valuation whose assumptions cannot be defended to a third party is not a valuation — it is an opinion.
Timeline and documents
A valuation typically takes three to eight weeks from receipt of the complete document set. Core requirements include three years of audited financial statements, operational data, the ownership structure and material contracts. The earlier the document set is complete, the shorter the timeline and the fewer the estimated assumptions.
