TSA Negotiation: How to ensure best practice and knowledge remain after a carve-out

When entering into a carve-out deal, there’s an expectation that the seller will continue to provide certain services to support the buyer while it establishes operations.

Often the parties enter into what is known as a Transition Services Agreement (TSA) that governs the temporary provision of services to the new company. As early as possible in the process, both parties should consider if a TSA is needed, what the scope will include and what the duration of the TSA will be, based on the complexity of the transaction.