Transition Services Agreement (TSA)
A transition services agreement, or TSA, is a contract under which a seller continues to provide defined services — very often IT, email, and infrastructure — to a divested business for a fixed period after a transaction closes, giving the buyer time to build independent capability.
What a TSA Typically Covers
IT is among the most common TSA scopes because it is the hardest to separate quickly. A technology TSA may cover email and identity hosting, ERP or line-of-business application access, network and data center services, and help desk support. Each service carries a defined duration, a service level, and a fee, and the fees generally escalate the longer the buyer takes to exit.
Why the Exit Date Drives the Plan
A TSA is a bridge, not a destination. Every carve-out and separation plan should be built backwards from the TSA expiry, because the consequence of missing it is either an expensive extension negotiated from a weak position or the loss of a service the business runs on. Treating the TSA date as the real deadline is what keeps a separation on schedule.
Why TSAs Matter for Investment & Professional Firms
Sponsors acquiring divested units are managing a countdown from the day they close. DKBinnovative plans separation work against the TSA calendar and builds the independent environment in parallel, so the exit is a planned cutover rather than a deadline scramble.