How to Value Intangible Assets in a UAE Deal, Patents, Brands & IP
Brands, patents, customer relationships, and technology platforms now drive the majority of deal value in many UAE transactions. Here is how to value them correctly, and why most advisory firms in the region get it wrong.
When a Dubai-based technology company sells for 8x revenue, most of the value being paid is not for its physical assets or even its current earnings, it is for its technology platform, its customer base, and its brand. In a growing proportion of UAE and GCC M&A transactions, intangible assets represent the majority of deal value, and are often either not valued independently at all, or valued using methods that would not survive scrutiny in due diligence.
The Four Categories of Intangible Value in UAE Transactions
1. Technology and Intellectual Property
Proprietary software, algorithms, databases, patents, and trade secrets. In technology, fintech, healthtech, and edtech transactions, technology assets are typically the primary value driver, and separating IP value from customer relationship value requires specific methodology.
2. Customer and Market-Related Intangibles
Customer lists, long-term contracts, customer relationships, distribution agreements, and franchise rights. In a business where 70% of revenue comes from a stable customer base with 5+ year tenure, the relationship has real, quantifiable economic value.
3. Brand and Marketing Intangibles
Trade names, trademarks, domain names, and brand equity. For consumer-facing businesses, retail, F&B, healthcare, hospitality, brand value can represent a substantial component of enterprise value above and beyond current EBITDA.
4. Human Capital and Assembled Workforce
The cost and time to assemble, train, and retain a specific team has value. In professional services and technology businesses, institutional knowledge is a meaningful component of what an acquirer pays for, usually captured via PPA rather than standalone valuation.
The Three Methodologies That Matter
Relief-from-Royalty (RfR)
Values an intangible by estimating the royalty payments avoided by owning rather than licensing it. The most widely used method for patents, brands, and trademarks. Royalty rate selection, derived from comparable licensing databases, is often the most contested element in a transaction.
Multi-Period Excess Earnings Method (MPEEM)
The standard approach for the primary intangible, customer relationships or core technology. Isolates cash flows attributable to the asset after deducting contributory asset charges. The method most commonly specified by auditors for PPA under IFRS 3.
Cost Approach
Values an intangible at the cost to recreate or replace it. Most appropriate for internally developed software and databases; less appropriate for customer relationships and brands, where value stems from perception and loyalty that cannot simply be recreated by spending money.
"Most UAE business valuations either ignore intangible assets entirely or lump them into a goodwill residual. For any business where IP, brand, or customer relationships are the primary value driver, this approach is not just inadequate, it is the wrong framework entirely."
Why Purchase Price Allocation Matters Post-Closing
Under IFRS 3, an acquirer must allocate the total purchase price across identifiable assets and liabilities, including all identifiable intangible assets, and only the residual goes to goodwill. Amortisation of identified intangibles reduces reported earnings for years after closing: a technology platform valued at AED 50M with a 10-year useful life generates AED 5M per year in amortisation. The right approach is a pre-close intangible asset valuation, so the acquirer understands the PPA implications as part of deal pricing, not as a surprise six months later.
What This Means for Sellers
If you are selling a UAE business with meaningful intangible assets, a recognisable brand, a proprietary technology, a loyal customer base, you should have an independent valuation before entering a sale process. A well-prepared seller with a credible, independently prepared valuation can substantiate a premium price with specific analysis, rather than simply asserting their brand or technology is valuable.
Corvian Advisory provides specialist intangible asset valuations for UAE and GCC transactions, patents, brands, trademarks, customer relationships, and technology platforms. IVS-compliant. Prepared by our senior CFA, CA and ACCA qualified team. View our Intangible Asset Valuation UAE →
Request an Intangible Valuation →Frequently asked questions
What are the three main methods for valuing intangible assets?
The income approach (discounting the cash flows the asset is expected to generate, such as relief-from-royalty for brands), the market approach (comparable transactions or licensing benchmarks), and the cost approach (replacement or reproduction cost, most relevant for internally-developed technology). Most credible valuations cross-check at least two methods.
Why does purchase price allocation matter after a UAE acquisition closes?
Under IFRS 3, an acquirer must allocate the total purchase price across identifiable assets and liabilities, including intangibles, with only the residual going to goodwill. Amortisation of identified intangibles then reduces reported earnings for years after closing, so getting the pre-close valuation right avoids surprises in post-acquisition financial reporting.
Should sellers get an intangible asset valuation before going to market?
Yes, if the business has a recognisable brand, proprietary technology, or a loyal customer base. A well-prepared seller with a credible, independently prepared valuation can substantiate a premium price with specific analysis, rather than simply asserting the brand or technology is valuable.