Mark, a senior partner at M-A Partners, has more than 25 years of professional experience in the areas of corporate strategy, MA and customer service management at a telecommunications strategy consulting firm. He led due diligence, integration planning before and after the acquisition and multi-country integrations for more than 20 deals with a total value of more than $5 billion. Marks` industry expertise includes: business development, telecommunications, strategy consulting and accounting/audit services. Transition service agreements are common when a large company sells one of its activities or certain non-essential assets to a less demanding buyer or to a newly created company in which management is present, but where the back-office infrastructure has not yet been assembled. They can also be used in carve-outs, in which a large company relocates a split to a separate public company and then provides infrastructure services for a defined period. Internal teams are already overloaded with day-to-day tasks. Launching them into the deal process can be a massive distraction. What some would call multitasking is actually a dilution of focus, which results in fewer optimal results for all parties involved. Regardless of the buy side or the Sell site, a dedicated resource with the right experience can quickly assess risks and requirements. In our experience, the resources involved in both deal teams can be directly involved in a reasonable agreement acceptable to all parties. Keep a customer perspective – During the transition service contract, there will be many situations where the buyer and seller may not agree on the approach, costs or duration.
When the situation arises, it is usually best to think about what is best from the client`s point of view. Both buyer and seller have an interest in ensuring that the products and services provided from the divested division remain at the highest level throughout the deal process. No one wants a customer to have a negative experience through the transaction. For more than 15 years, Mark has had customer-focused consulting functions for clients such as AT-T, Sprint/Nextel, Cox and P-G, Microsoft and Piper Jaffray. His career began as a CPA at Deloitte in Minneapolis, Minnesota, and his experience includes several overseas assignments in Prague, Czech Republic, and Melbourne, Australia. 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: A TSA is a fairly accurate example of real events: Mom and Dad help with their son`s expenses for the first few handfuls of months he works, but soon enough he is able to take care of everything on his own.