Are We Chasing the Myth of a TSA-Free Carve-Out?

Can We Do This Carve-Out Without TSAs?

One of the most common questions buyers and sellers explore during the deal design or diligence process is: can we do this carve-out without TSAs?

On paper, a TSA-free deal looks ideal.

• No TSA fees.

• No post-Close obligations for the seller.

• Full autonomy for the buyer to pursue accelerated value creation from Day.

• Clean, efficient, and attractive.
  
  

But looked at more closely, removing TSAs does not eliminate complexity or cost. It simply pulls them forward. The work does not disappear — it gets front-loaded into design, decision-making, and separation execution before Closing. That, in turn, amplifies and concentrates risk early in the deal cycle.

And carve-outs are notoriously complex. Even “clean” businesses — whether lift-and-shifts or businesses that appear to have a well-separated IT estate — often carry embedded knowledge, hidden dependencies, and operational links that are not obvious at first glance. TSAs exist for a reason: they help de-risk separation.

The Risks of a Zero-TSA Carve-Out

A zero-TSA carve-out introduces several material risks.

1. Significant upfront financial exposure for the buyer

Buyers need to mobilize early — system integrators, vendors, contracts, and internal teams all need to be lined up well in advance.

If the deal later goes south, many of these investments become sunk costs, eroding the buyer’s ROI.

2. A much longer Sign-to-Close period, increasing uncertainty

Significant implementation work ahead of Closing naturally stretches timelines.

That is not ideal for either party. In deals, every extra day to Close is another day of uncertainty and execution risk.

3. Heavy reliance on seller collaboration — which is hard to achieve

Buyers typically need early access to the seller’s data, systems, processes, and know-how. In practice, sellers often face confidentiality constraints, competing priorities, and limited incentive to provide heavy support before Close.

So while a TSA-free structure may sound cleaner in theory, the practical reality is often very different.

So What Is the Antidote?

1. Serial divestors who can dictate the buyer profile

Serial divestors with repeatable separation playbooks and dedicated teams are much better positioned to deliver TSA-light or TSA-free outcomes.

Businesses such as Shell, Unilever, and BP, which actively manage portfolio rationalisation, are often better prepared for this kind of execution. They can also influence the buyer profile — whether corporates or PE buyers — which can make TSA-free execution easier to land.

2. Intentional TSA design — the pragmatic middle ground

Rather than trying to eliminate TSAs entirely, a more pragmatic approach is to design them deliberately.

That means:

• Using TSAs only for Day-1 critical services

• Keeping the scope tightly aligned to the target operating model

• Building a clear exit path from the start
  
  

Final Thought

The idea of a TSA-free carve-out is attractive… until it is not.

A better question is: where do TSAs genuinely protect value, and how do we design them to exit quickly?