> tpl_trn_013
Carve-Out, Separation and TSA Requirements Worksheet
Comprehensive divestiture separation worksheet defining Transition Services Agreements (TSAs), shared IT infrastructure disentanglement schedules, stranded cost mitigations, and data isolation protocols.
Divestiture worksheet tracking Transition Services Agreements (TSAs), stranded costs, and systems disentanglement.
Important Tech Document Template & Operational Notice
TinyCTO.tv Tech Document Template Notice: This template is a general educational and operational starting point. It is not legal, tax, accounting, investment, procurement, regulatory, security or certification advice. Requirements vary by jurisdiction, organization, contract and risk. Review and adapt it with qualified professionals before relying on it.
Problem Solved
Corporate divestitures and private equity carve-outs suffer severe margin erosion, vendor penalties, and legal disputes when shared IT services, enterprise software licenses, and data stores are not cleanly ring-fenced with clear TSA exit pricing.
When to Use
- •Planning and negotiating a corporate divestiture, carve-out, or spin-off to a private equity buyer
- •Authoring formal Transition Services Agreement (TSA) Service Schedules with defined SLA metrics and monthly markup rates
- •Calculating and mitigating post-separation stranded overhead costs remaining in the parent company
When NOT to Use
- •For standard single-company vendor contract negotiations (use TPL-PRC-001)
- •For acquiring entity integration plans (use TPL-TRN-012)
5 Template Sections & Structural Outline
Establishing the exact boundary between ParentCo (Retained) and TargetCo (Carved-Out) across applications, infrastructure, networks, and personnel.
Formulating legal Service Schedules for each provided service (IT hosting, payroll, desktop support) with fully loaded cost, management markup, and SLA penalties.
Executing database splits, tenant migrations, email archiving, and GDPR/CCPA data boundary isolation.
Negotiating assignment rights, carve-out split fees, and independent tenant setups with vendors like SAP, Oracle, Microsoft, and Salesforce.
Identifying overhead costs (excess data center capacity, remaining software seats) left behind in ParentCo, with structured downsizing timelines.
Completion Instructions
Independent Review Checklist
- All mandatory sections completed
- No secrets or passwords included
- Executive sponsor sign-off obtained
Carve-Out, Separation and TSA Requirements Worksheet - Worked Case Study
Fictional Entity: OmniCorp Industrial Divestiture of AeroParts Global ($620M Carve-Out to PE)
Real-world production case study demonstrating complete operational adoption for OmniCorp Industrial Divestiture of AeroParts Global ($620M Carve-Out to PE).
- •Drafted 28 distinct TSA Service Schedules spanning SAP ERP hosting, global WAN connectivity, and HR payroll processing
- •Structured step-up TSA pricing (+25% at Month 9, +50% at Month 12) compelling TargetCo to exit TSAs 3 months ahead of schedule
- •Eliminated $14.2M in ParentCo stranded IT overhead within 8 months of separation through data center lease terminations
Frequently Asked Questions
What are "Stranded Costs" in a corporate carve-out and how should they be handled?
Stranded costs are ongoing indirect expenses (e.g. data center leases, enterprise software licenses, central IT management salaries) that supported the divested business but remain with the parent company after the sale. ParentCo must aggressively downsize or renegotiate contracts to eliminate stranded overhead within 6 to 12 months.
Why do buyers and sellers incorporate "Step-Up Pricing" into Transition Services Agreements?
Step-up pricing increases monthly TSA fees (e.g. adding 25% after 6 months and 50% after 12 months) to financially motivate the buyer to rapidly build independent systems and exit the agreement, freeing the seller from operational distraction and liability.
What is the biggest operational risk during carve-out data segregation?
The greatest risk is cross-contamination or accidental deletion of proprietary historical data in shared multi-tenant databases. Clean database partitioning and third-party certified cryptographic erasure must be conducted before cutover.
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Authoritative Sources
- Deloitte: Navigating IT Carve-Outs and Transition Service AgreementsDeloitte M&A Practice • OFFICIAL REQUIREMENT
- PwC: Managing Stranded Costs in DivestituresPwC Deals • OFFICIAL REQUIREMENT
- EY: How to Successfully Execute an IT Carve-OutErnst & Young • OFFICIAL REQUIREMENT