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
