Transition Service Agreements

We are experts in creating and managing TSAs.

Client challenges

  • TSA uncertainty results in buyers leaving the bidding process
  • what are the elements of solid TSA’s
  • post close, poorly designed TSA’s disrupt day-to-day work, causing extra work and cost for both buyer and seller
  • price setting and stranded cost assessment

How we can help

  • TSA clarity to buyer and seller keep more buyers in the bidding process
  • We know how to provide feedback to legal teams for the overarching legal framework
  • create TSA’s, manage people to obtain sign-off from buyer and seller
  • post-close damage control in case of poor or no TSA’s, and in contract negotiation
  • auditable pricing backbone

Key benefits

  • Seller: higher selling price; market reputation; interdependencies with other workstreams, suppliers, etc. taken into account; insight in stranded costs
  • Buyer: business continuity; access to know-how; à la carte menu
  • Both buyer and seller: efficient invoicing; operate in a framework for early termination, extension, modification, and TSA exit

Lessons learned

  • inconsistencies between TSA terms and duration cause dysfunctional agreements
  • lack of detail causes discussion post signing on what is and is not in included in the service
  • 3rd party license fees can rarely be used by the parent for services to the carved out unit
  • poor preparation results in double work and cost post-closing

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