Transition Services Agreement (TSA) Consultants

The transition services agreement is the most consequential operating document of any carve-out, and one of the least well-managed. It governs how a divested business runs for the 6, 12, or 24 months after close, what services the parent continues to provide, at what price, at what service level, with what exit terms. It sits at the intersection of the SPA, the integration plan, and the standalone operating model, and it touches every function in the business. Done well, the TSA gives the carved-out entity a stable runway to stand up on its own. Done poorly, it becomes the vehicle through which deal value leaks quietly for two years — through underpriced services, scope creep, missed exit deadlines, and stranded costs the parent never recovers.

Stonehill provides senior transition services agreement consultants to middle market sponsors, corporate divestiture teams, and PE-backed acquirers managing the full TSA lifecycle. Our practitioners have personally scoped, negotiated, run, and exited TSAs across financial services, consumer, industrials, and tech-enabled services. We work embedded inside your separation management office or integration management office, on either side of the deal, with full accountability for the operational reality the agreement describes. We are not the firm that hands you a TSA template. We are the firm that makes the TSA actually work — and end on time. We are the firm that makes middle market mergers work.

Our Transition Services Agreement Consulting Services

TSA Scoping and Service Catalog Development

The service catalog is the foundation of the entire agreement, and the place where most TSAs go wrong before they are even signed. We facilitate the function-by-function discovery work that produces a defensible catalog: applications and infrastructure, finance and accounting close support, HR administration and payroll, procurement and AP, IT service desk, security and identity management, real estate and facilities, and the dependencies that surface only when the right questions get asked. We document service levels, volumes, and consumption assumptions so that pricing and exit timing rest on something more than estimates.

• TSA Cost Modeling, Pricing, and Allocation Methodology - Pricing the TSA is where the seller's stranded cost recovery and the buyer's standalone cost assumption either align or quietly diverge. We build service-level cost models grounded in direct costs, allocated overhead, one-time set-up fees, and a markup methodology that holds up to scrutiny on both sides. For the seller, the model defends the pricing in negotiation and supports stranded cost recovery against the parent P&L. For the buyer, it ensures the TSA cost in the LBO or strategic acquisition model matches what will actually flow through the income statement after close.

• TSA Negotiation and Drafting Support - The TSA is negotiated in parallel with the SPA, often under deal-close pressure, by deal counsel and finance leads who may not have run an operating TSA before. We sit alongside legal and the integration lead to drive the operational substance: schedules, service-level commitments, governance terms, change-of-scope and out-of-scope provisions, extension rights, exit notice periods, and the dispute resolution mechanism. Our job is to keep the operating reality in the room while counsel handles the contractual architecture, so the agreement reflects what the business actually needs.

• TSA Management Office and Operational Governance - Once the TSA is in force, somebody has to run it on each side. Stonehill stands up and runs the TSA management office for our clients — service-level tracking, monthly governance reviews, change request workflow, billing reconciliation, dispute escalation, and the cross-functional operating rhythm that keeps both organizations honest. For the seller, we prevent scope creep, missed billings, and uncontrolled extensions. For the buyer, we ensure the services that were promised in the schedules are actually delivered at the committed quality and timing.

• TSA Exit Planning, Cutover, and Stranded Cost Mitigation - TSA exit is the work that gets least planning at signing and creates the most value when done well. We build and execute the function-by-function exit plan: standalone capability buildout, dependency sequencing, cutover orchestration, parallel run periods where required, and the contractual notice and termination steps that retire each service cleanly. On the seller side, we drive the parallel program to mitigate stranded costs — the headcount, contracts, real estate, and infrastructure that were sized for a business that no longer exists. The objective on both sides is the same: end the TSA on or ahead of schedule, with no operational surprises and no value left on the table.

Why Stonehill

TSA work rewards depth over breadth. The questions that drive cost, risk, and timeline are functional and operational — service catalogs, allocation methodologies, cutover dependencies, contract terms, governance discipline. They are answered by senior practitioners who have run the work before, not by a leveraged team with a binder of templates. Stonehill staffs every TSA engagement with embedded senior leads who have personally negotiated, managed, and exited transition services agreements for middle market sponsors and corporate clients including Valley National Bank, PODS, FIS, The Melting Pot, Red Bull, and Starbucks Latin America.

If you are scoping a TSA in active diligence, negotiating one against a closing deadline, running one that is starting to slip, or planning an exit that is closer than your team is ready for, we should talk. Reach out for a working session — we will come prepared with a view on your specific situation, not a generic capabilities deck.