Structuring And Operationalising TSAs For Carve-out Success

Every transition services agreement (TSA) is specific to the carve-out deal, and aligning the expectations of both the buyer and the seller is critical.

A properly negotiated TSA allows management to focus on significant issues and opportunities and helps reassure employees about the future prospects of the carve-out.

Often the reason companies carve out and sell, or spin off, divisions is because they don't align with their current business strategy. As result, carve-outs are typically a fraction of the size of their former parent companies and lack the depth of management or scope of corporate services. Understanding how to structure the entities and how to manage local regulatory requirements across multiple markets can consume precious management time and require specific local and global knowledge, as do tasks like appointing a local director, VAT registrations and setting up bank accounts. Functions such as accounting, HR and payroll also need to be