Tsa Services Agreement

A Transitional Service Agreement (TSA) is between a buyer and seller and provides that once the transaction is complete, the seller will provide infrastructure support, such as accounting, IT and HR. TSA is common in situations where the buyer does not have the management or systems to absorb the acquisition, and the seller can offer it for a fee. The company, supported by KPMG, quickly developed an entire TSA program management team and a rigorous governance process with the vendor to facilitate communication, resolve issues, and manage change requirements. The company was able to move away from TSA services in several regions and avoid business interruptions within the required time frames. Effective communication ensured coordination between the buyer and seller and resolved issues in a timely manner. The focus on exit planning contributed to the early termination of some TSA services, resulting in significant cost savings. Carveouts are among the most complex transactions. This is especially true when the carveout involves the sale of an operationally integrated business into the rest of the parent company`s business. In the case of such transactions, the seller may be required to continue to provide the buyer with assistance for critical services after conclusion. This support is formalized by a “Transition Service Agreement” (TSA) and includes one of the documents signed at the time of conclusion (with contracts for the sale of shares and/or assets).

From a buyer`s perspective, ensuring that a TSA is structured in the most efficient way, balancing business continuity with ensuring support and reliability, while ensuring fair service costs, is a critical success factor for agreements. Here are some of the most important considerations in structuring an TSA: A transition service agreement (TSA) is an agreement between a buyer and a seller in which the seller enters into its services and know-how with the buyer for a certain period of time in order to support the buyer and get used to its newly acquired assets. Infrastructure, systems, etc. The good news is that there are more options than ever before, provided you have ONE simple component. Internet service. New IT deployment models, such as Cloud and SaaS, can provide a lifeline if time is of the essence. Most enterprise IT organizations provide Internet services over a single WAN (Wide Area Network) connection. Sell-Side-IT quickly reduces WAN service due to security risks and high monthly costs. Processing of new circuit orders usually takes 90 days and installation an additional 30 days. The best advice I can give is: have a plan to get a new internet connection before day one, even if it`s just broadband for consumers. 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: the escalation trajectory of TSA performance, service interruptions and emergency issues must be agreed upon prior to conclusion.

One possibility is to set up a joint steering committee, with the participation of important leaders from both sides, who meet regularly (bi-monthly, etc.) during the EBA period, in order to solve important problems. This forum can be supplemented with additional touchpoints for certain TSA services – for example.B Payroll, Accounting, Systems, etc. The escalation protocol for dealing with issues involving third parties should also be agreed prior to conclusion (including the necessary agreement of the 3rd parties involved). Defining the scope of the TSA is the buyer`s most critical decision….

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