In the classic mental picture of an M&A transaction, the snapshot is always the same: a buyer acquires 100% of the company on a specific date, the documents are signed, the price is paid and the seller moves on. However, in the mid-market, in family-owned companies and in certain niches, another approach is becoming increasingly common: selling in stages, also referred to as a \u201cphasing deal\u201d<\/strong> or a staggered exit<\/strong>.<\/p>\n Put simply, a phasing deal involves not selling the entire company \u201cin one go\u201d<\/strong>, but structuring the transaction in several phases: an initial partial entry (as a percentage of equity or a business perimeter) and one or more subsequent stages in which, subject to certain conditions, the buyer acquires the remainder.<\/p>\n When well designed, this approach can be a very powerful tool to:<\/p>\n When poorly designed, it can become a complex structure that generates conflict and is difficult to finance. The question, therefore, is not only whether a staged sale is possible, but when it is attractive and how to structure it properly<\/strong>.<\/p>\n There is no fixed legal definition, but in practice we talk about a phasing deal when two basic elements are present:<\/p>\n From there, the possible combinations are highly varied. Some typical examples:<\/p>\n In all cases, the logic is the same: to decouple over time the full transfer of value and\/or control<\/strong>, instead of concentrating everything on a single closing date.<\/p>\n Not every transaction lends itself to a staggered sale. In some processes, seller and buyer prefer a clean transaction with no future commitments. However, there are contexts in which a phasing deal is worth analysing in depth.<\/p>\n Some companies have a solid base but a clear runway for professionalisation, product range expansion, geographic expansion, digitalisation or margin improvement. The seller is convinced the business is worth more than current figures suggest, but:<\/p>\n In those situations, selling in stages allows the seller to:<\/p>\n In family businesses, the issue is not only financial; it is generational and emotional. The outgoing generation wants to organise its withdrawal without leaving the company \u201corphaned\u201d, and the next generation or the management team needs time to consolidate.<\/p>\n A phasing deal can help to:<\/p>\n This type of structure softens the impact and facilitates the transfer of key relationships, business knowledge and internal leadership.<\/p>\n In sectors exposed to regulatory, technological or demand shifts, it is common for buyer and seller to have very different views of the future. The seller believes the sector will re-rate; the buyer fears they may be \u201coverpaying\u201d at a delicate time.<\/p>\n A staged sale enables risk-sharing<\/strong> on the future. The buyer acquires a portion on reasonable terms and defers payment of another portion to the evolution of:<\/p>\n In this way, the seller does not give away all the upside, and the buyer does not pay all of it upfront.<\/p>\n In other cases, the industrial rationale exists, but the buyer cannot \u2014 or does not want to \u2014 finance 100% of the purchase immediately without placing excessive strain on its balance sheet.<\/p>\n A phasing deal allows the parties to:<\/p>\n Here, deferred consideration, vendor loans and well-designed options<\/strong> play a particularly prominent role, balancing the seller\u2019s return needs with the buyer\u2019s financial prudence.<\/p>\n Although each case has its nuances, some advantages recur.<\/p>\n For the seller, a staged sale can offer:<\/p>\n For the buyer, typical advantages include:<\/p>\n Phasing deals introduce complexity and, if poorly managed, can generate significant conflict.<\/p>\n Some critical points:<\/p>\n That is why the design of a phasing deal should not be a late \u201cappendix\u201d at the end of negotiations, but rather a central axis addressed from the outset with financial, legal and tax advisers.<\/p>\n From a corporate finance perspective, a staged sale affects three pieces of the puzzle directly: the receipt timetable, the debt structure and the valuation logic<\/strong>.<\/p>\n In terms of cash proceeds for the seller<\/strong>, a phasing deal combines:<\/p>\n Modelling how those cash flows fit into the entrepreneur\u2019s personal wealth is essential: what portion of value is secured today, what portion depends on milestones over which they will have less control, and what time horizon makes sense personally and financially.<\/p>\n As to the buyer\u2019s debt<\/strong>, staged structures often allow for more prudent initial leverage. The idea is that:<\/p>\n From the perspective of banks and lenders, this can make the transaction more bankable than a highly leveraged \u201c100% upfront\u201d, provided the future payment timetable and option conditions are well defined.<\/p>\n Finally, from a valuation<\/strong> standpoint, a phasing deal forces a shift from a static snapshot to something more like a film: part of the value is set based on the current situation and another part is left open, subject to execution of the business plan. The clearer and more transparent this scheme is, the less room there will be for future misunderstandings.<\/p>\n There is no single recipe, but it is often a reasonable alternative when several of the following elements coincide:<\/p>\n By contrast, it is probably not a good idea to propose a staged sale when:<\/p>\n Designing and executing a robust phasing deal requires fitting together strategic, financial, legal, tax and personal pieces. That is where an adviser specialised in corporate finance and M&A adds significant value.<\/p>\n Their role is not limited to \u201cfinding a buyer\u201d or \u201cagreeing a price\u201d. Among other things, they can:<\/p>\n\n
1. What is a phasing deal?<\/h2>\n
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2. When it may be attractive to sell a business in stages<\/h2>\n
2.1. Businesses with unrealised uplift potential<\/h3>\n
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2.2. Family succession and gradual shareholder retirement<\/h3>\n
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2.3. Sectors with high uncertainty or regulatory change<\/h3>\n
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2.4. Buyer financing constraints<\/h3>\n
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3. Main advantages for seller and buyer<\/h2>\n
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4. Risks and key watch-outs: it is not all upside<\/h2>\n
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5. The financial dimension: cash, debt and valuation<\/h2>\n
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6. When does a phasing deal make sense?<\/h2>\n
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7. How Maraz Corporate Finance can help<\/h2>\n
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