About the Author: Ali Shah Khawaja is a Senior Manager M&A at Platform01 Consulting,
Beyond Market Share: Jahez's Proposed SAR 650 Million Acquisition of The Chefz – An M&A Case Study in Saudi Arabia
MERGERS & ACQUISITIONS · SAUDI ARABIA · STRATEGIC ADVISORY
Jahez's proposed acquisition of The Chefz offers an interesting example of how companies can use M&A to expand beyond their core markets, diversify revenue streams and strengthen their competitive positioning. However, it also demonstrates an important reality of corporate transactions: strategic alignment and an agreed valuation do not automatically translate into a completed acquisition.
The proposed SAR 650 million transaction, announced in November 2022, was designed to bring two complementary Saudi food delivery businesses together. While Jahez had established a strong position in quick-service food delivery, The Chefz operated in premium dining, confectionery, flowers, perfumes and leisure-related services.
The transaction provides valuable lessons for businesses evaluating acquisitions in Saudi Arabia and the wider GCC, particularly around deal structuring, commercial due diligence, valuation and regulatory execution.
1. Background: Two businesses with complementary market positions
Jahez International Company for Information System Technology is a Saudi technology company operating digital platforms connecting consumers with restaurants and other merchants. Founded in 2016, Jahez developed its business around food ordering, delivery infrastructure and merchant partnerships.
The Chefz operated a specialised digital platform offering a curated selection of premium dining experiences, baked goods, confectionery, flowers and perfumes. Its platform also offered restaurant reservations, bookings and ticketing for selected restaurants and events.
The strategic opportunity was to combine Jahez's established delivery capabilities with The Chefz's differentiated merchant network and premium consumer offering.
Business | Core positioning |
|---|
Jahez | Quick-service food delivery and technology-enabled logistics |
The Chefz | Premium dining, confectionery, gifts and lifestyle delivery |
Rather than simply acquiring another food delivery competitor, Jahez was seeking to expand its presence across adjacent consumer categories.
2. The proposed SAR 650 million transaction
On 29 November 2022, Jahez signed a Share Purchase Agreement (SPA) to acquire 100% of The Chefz SPV Ltd.
The transaction was based on an equity valuation of SAR 650 million, with consideration structured through a combination of cash and newly issued Jahez shares.
The structure had two important financial implications.
First, the cash component would require a substantial capital commitment from Jahez. Second, issuing new shares would allow part of the acquisition consideration to be settled without an equivalent cash outflow, while giving eligible sellers an ownership interest in the acquiring company.
The share issuance was expected to increase Jahez's share capital by approximately 3.6% relative to its pre-issuance capital.
What the deal structure tells us
A mixed cash and equity acquisition can help balance the financial interests of both parties.
For the acquirer: It reduces the immediate cash requirement compared with an entirely cash-funded transaction.
For the sellers: Equity consideration provides exposure to the future performance of the combined business.
For the founders: A performance-linked earn-out can connect part of the consideration to agreed business performance.
However, these structures also require careful negotiation of share valuation, dilution, earn out conditions, performance measurement and shareholder rights.
This is where experienced M&A consultants can support businesses through transaction structuring and financial analysis.
3. Strategic rationale: Why was Jahez interested in The Chefz?
The proposed acquisition was based on the opportunity to extend Jahez's existing platform into complementary consumer segments.
A. Diversification beyond conventional food delivery
Traditional food delivery platforms often compete on delivery speed, restaurant selection and pricing. The Chefz offered access to a different segment of consumer spending, including premium dining, confectionery, gifts and lifestyle-related purchases.
This could have allowed Jahez to broaden its addressable market and reduce its reliance on conventional restaurant delivery.
B. Access to a differentiated merchant network
Acquiring an established platform can provide faster access to merchants, customers and specialised market segments than developing an equivalent offering internally.
For Jahez, The Chefz's existing merchant relationships and premium positioning represented potential strategic assets.
C. Cross-selling opportunities
The combined platforms could potentially have created opportunities to introduce Jahez customers to The Chefz's premium categories and expose The Chefz customers to Jahez's broader merchant ecosystem.
However, these opportunities would have depended on customer overlap, retention, marketing costs and successful platform integration. They should be treated as potential synergies, not guaranteed financial benefits.
D. Strengthening competitive positioning
The proposed transaction reflected a wider growth strategy: expanding through acquisition rather than relying exclusively on organic development.
For established GCC businesses, acquisitions can provide access to new customer segments, capabilities, geographical markets and complementary revenue streams.
4. Financial analysis: Understanding the valuation
The proposed SAR 650 million equity valuation raises an important question: how should an acquirer determine whether a target business is worth the proposed purchase price?
An acquisition valuation should not be based exclusively on market positioning or projected revenue growth. It should incorporate financial performance, cash generation, customer economics, competitive positioning and the risks associated with future expansion.
In a transaction such as this, an M&A advisory team would typically consider several valuation approaches.
Valuation approach | Application |
|---|
Discounted Cash Flow (DCF) | Estimates the present value of expected future cash flows |
Comparable Companies Analysis | Benchmarks the target against similar listed businesses |
Precedent Transactions | Compares the deal with valuations achieved in similar acquisitions |
Revenue Multiples | Evaluates valuation relative to the target's revenue |
EBITDA Multiples | Assesses valuation against operating profitability |
Jahez's financial performance: subsequent company-level context
Jahez's published consolidated financial statements provide useful context on the scale and financial performance of the acquiring company after the proposed transaction.
The following figures are Jahez Group's reported results, not The Chefz's standalone financial performance and not evidence of synergies from the proposed deal.
Financial indicator | 2024 | 2025 |
|---|
Revenue | SAR 2.22bn | SAR 2.32bn |
Gross profit | SAR 541.2m | SAR 530.1m |
Operating profit | SAR 168.9m | SAR 49.4m |
Net profit | SAR 184.2m | SAR 57.9m |
Source: Jahez's published FY2025 consolidated financial statements.
What an acquirer should investigate before agreeing on valuation
A comprehensive commercial and financial due diligence exercise would examine:
Historical revenue growth and the quality of reported earnings.
Customer acquisition costs, retention and repeat-purchase behaviour.
Gross margins across different product and service categories.
Merchant concentration and contractual relationships.
Delivery costs, operational efficiency and contribution margins.
Working capital requirements and future funding needs.
Forecast assumptions supporting the proposed valuation.
For an acquisition involving a digital platform, customer economics and technology infrastructure are particularly important. A growing customer base does not necessarily translate into sustainable profitability.
5. Commercial due diligence: Identifying the real value of the acquisition
Commercial due diligence is one of the most important components of an acquisition process. It helps an investor or acquiring company determine whether the target's commercial fundamentals support the investment thesis.
In the Jahez–The Chefz case, the central question would have been whether combining the two platforms could generate sufficient incremental value to justify the proposed consideration.
A structured assessment would include the following areas.
Market attractiveness
Size and growth of Saudi Arabia's online food delivery and premium dining markets.
Consumer demand for premium food, gifting and lifestyle services.
Competitive positioning against established delivery platforms.
Market penetration and opportunities for further expansion.
Customer and revenue analysis
Customer acquisition and retention rates.
Average order value and purchasing frequency.
Customer lifetime value.
Revenue contribution by product category.
Potential customer overlap between the two platforms.
Operational assessment
Delivery network capacity and geographical coverage.
Merchant onboarding and retention.
Technology infrastructure and platform scalability.
Customer service and fulfilment costs.
Synergy assessment
Potential cost savings from shared logistics.
Cross-selling opportunities.
Consolidation of marketing and technology expenditure.
Improved merchant relationships and purchasing economics.
These assessments help management distinguish between theoretical synergies and commercially achievable value.
6. Deal execution: Why the proposed acquisition did not complete
Important transaction outcome
The most significant lesson from this case is that the proposed transaction did not ultimately proceed to completion.
Following the original November 2022 announcement, the transaction underwent an extended approval and execution process.
The Saudi Exchange announcement confirmed that the SPA and its extensions had lapsed without satisfaction of material conditions necessary to complete the transaction.
It is important not to speculate about the specific commercial or regulatory reasons behind the failure to complete. The public disclosure establishes the lapse of the agreement, not a definitive explanation for every outstanding condition.
What this means for M&A execution
This case illustrates that an agreed purchase price and signed SPA are only parts of a much larger transaction process.
An acquisition can face execution challenges involving:
Regulatory approvals and competition requirements.
Shareholder and corporate approvals.
Conditions precedent under the SPA.
Financing arrangements and transaction funding.
Timelines for satisfying contractual obligations.
Commercial or operational changes during the transaction period.
Effective transaction management requires these matters to be identified and monitored from the beginning.
For companies considering acquisitions, experienced M&A advisory firms can help assess execution risks, coordinate due diligence, evaluate transaction structures and support negotiations before and after signing.
7. Key lessons for GCC businesses considering acquisitions
The Jahez–The Chefz transaction offers several lessons for businesses evaluating inorganic growth opportunities across Saudi Arabia and the wider GCC.
1. Strategic fit must translate into measurable financial value
An acquisition should have clearly defined objectives, whether revenue growth, cost efficiencies, market expansion or access to new capabilities. Strategic alignment alone is not sufficient to justify a purchase price.
2. Valuation must reflect commercial realities
Projected growth and market positioning should be supported by financial models, realistic assumptions and independent commercial assessments.
3. Due diligence must extend beyond financial statements
Understanding customers, competitors, merchant relationships, operational capabilities and technology infrastructure is essential when acquiring a digital business.
4. Transaction structuring matters
Cash consideration, equity issuance and earn-outs can help align the interests of buyers and sellers. However, each component must be carefully negotiated and assessed.
5. Execution planning should begin before signing
Regulatory approvals, contractual conditions and shareholder requirements should be incorporated into a realistic transaction timetable.
8. The role of M&A advisory in successful transactions
Transactions of this nature demonstrate why professional advisory support is important throughout the acquisition lifecycle.
Businesses evaluating acquisitions require more than assistance with negotiations. They need a structured approach to identifying opportunities, assessing commercial viability, establishing appropriate valuations and managing transaction execution.
Professional M&A consulting services can support this process through several interconnected workstreams:
Advisory workstream | Key activities |
|---|
Transaction strategy | Acquisition rationale, target screening and growth objectives |
Financial advisory | Financial modelling, valuation and scenario analysis |
Commercial due diligence | Market assessment, competitor analysis and commercial risks |
Deal structuring | Cash, equity, earn-outs and transaction terms |
Transaction support | Negotiations, documentation coordination and execution |
Post-deal planning | Integration priorities, synergy tracking and performance monitoring |
For businesses evaluating strategic acquisitions, selecting from the top M&A advisory firms requires consideration of sector expertise, transaction experience, analytical capabilities and an understanding of the local regulatory environment.
In Saudi Arabia, consulting companies in Saudi Arabia with regional market knowledge and international financial advisory experience can help businesses navigate the complexities of corporate transactions.
Beyond transaction execution, business growth strategy services can help management determine whether an acquisition is the most appropriate route to achieving long-term objectives or whether organic expansion, partnerships or strategic investments would offer better value.
9. Conclusion: Beyond the acquisition price
The proposed Jahez–The Chefz transaction demonstrates both the strategic opportunities and execution challenges associated with mergers and acquisitions in Saudi Arabia.
Its proposed SAR 650 million valuation reflected an ambition to expand beyond conventional food delivery into premium dining, confectionery and lifestyle-related services. Its mixed cash-and-equity structure also illustrated how acquisition consideration can be designed to balance funding requirements and shareholder interests.
However, the subsequent lapse of the agreement highlights an equally important consideration: successful M&A depends on more than strategic rationale and valuation. It requires robust due diligence, effective transaction structuring, regulatory planning and disciplined execution.
For GCC businesses considering acquisitions, the broader lesson is that sustainable value creation begins well before a transaction is signed.
Platform01 Consulting Group supports businesses and investors through strategic advisory, corporate finance, financial modelling, business valuation and commercial due diligence. Our approach focuses on helping decision-makers evaluate opportunities, understand transaction risks and develop commercially grounded growth strategies.
Whether evaluating a potential acquisition, preparing for a sale or exploring expansion opportunities, informed decision-making remains central to successful corporate development.
