Transitional Service Agreement (Tsa)

Maintaining a TSA office on the buyer`s side is an effective way to manage TSA agreements with the seller. This agreement has the following advantages: defining the scope of the TSA is the buyer`s most important decision. Buyer due diligence should be effective in identifying all necessary systems, services and support (e.g., accounting. B, payslip, specific applications, infrastructure, etc.) parent company after the closure, to ensure business continuity and minimal operating disruptions. A look at TSA services, which are needed via a customer-oriented lens, is a great way to identify the key priorities that allow a seamless transfer from seller to buyer. In addition to the systems, services and support required, due diligence should also focus on large planned projects that could affect the size of the ASD and the key personnel needed to support the TSA. Carveouts are among the most complex transactions. This is particularly the case when it comes to the sale of an integrated industry in the rest of the parent company`s business. In such transactions, the seller may be required to continue to provide the buyer with assistance for critical services after closing. This support is formalized by a Transitional Service Agreement (TSA) and includes one of the documents signed at the time of conclusion (in addition to share and/or asset sales contracts).

From the buyer`s point of view, ensuring that an ASD is structured as efficiently as it balances business continuity and ensures support and reliability, while ensuring fair service costs, is a key factor in successful deals. Here are some of the most important considerations in structuring an ASD: the price structure of TSA services must be clearly defined and structured, based on well-measurable metrics – z.B. for support staff, mips for computing power, $/Gb for memory, etc. Each TSA service must be independently calculated where possible. Avoid a situation where the price of a TSA service depends on or is related to another TSA service – this will make it difficult to leave individual services without leaving all services.