Transition service agreements (TSAs) are a core component of carve-outs. These agreements define and govern the services between sellers and buyers that enable operational separation by deal close. Whether acquiring a business to operate on its own or to merge with another, it’s critical that parties align their value creation strategy with their TSA exit strategy to seamlessly navigate the transition period.
Yet in many deals, TSA exit plans are built around operational constraints rather than the value story. We call this the “TSA Exit Trap.” The right question is not “What can we exit fastest?” but “What should we exit first to accelerate value creation?”
Our approach is called value sequencing: Building the TSA exit roadmap backward from the investment thesis rather than forward from entanglements and dependencies.
