Published: 25 April 2024
M&A leaders often struggle with effective transition planning, especially in IT, finance, and sales. This research provides key insights on optimizing transition services agreements, helping leaders ensure operational continuity during complex transitions.
Widespread adoption and function coverage: 82% of companies use TSAs in transactions, primarily covering IT (72%), Finance (56%), and Sales (37%), indicating their critical role in maintaining operational continuity post-transaction.
Duration and third-party involvement: The typical TSA duration is 17 months, extending to 19 months for supply chain functions, with more than 50% involving third-party vendors, especially for IT services, highlighting the complexity and external support required for successful transitions.
Financial structuring and enforcement: A cost plus a margin pricing method is the most common approach (52% of the time). Furthermore, penalties for TSA extension are frequently utilized, with 63%
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