Buy · Step 3
Screen, sign NDA, and review the Information Memorandum
~10 min
First filter: does the headline math even work? Second filter: does the IM survive a careful read?
30-minute screen
- Revenue trend (3 years): growing, flat, or declining?
- EBITDA margin vs sector average
- Asking price as a multiple of EBITDA (sector-typical or rich?)
- Customer concentration (any single customer > 25% of revenue is a red flag)
- Owner involvement (will the business survive without them?)
NDA & IM
- Sign a mutual NDA before the seller shares financials.
- Read the Information Memorandum end-to-end. Twice.
- Build a question list — anything unclear or unsupported.
- Have a 60-min call with the owner. Test the IM claims.
Calibrate against the market
Kenyan SME multiples typically sit at 2.5–4x EBITDA for services, 3–5x for stable retail, and 5–8x for tech-enabled growth businesses. Anyone asking 10x without a defensible growth story is testing you.
Disclaimer
The information in this guide is provided for general guidance only and is subject to change. Fees, timelines, and regulatory requirements in Kenya are updated regularly. Before acting, please confirm details with the relevant authority (KRA, eCitizen, BRS, county government, or other regulator) or speak with a qualified MyBiashara advisor. MyBiashara is not liable for decisions made solely on the basis of this content.
