By Simon Wells, for Forbes Business Council.
In carve-out transactions, every additional month under a Transitional Service Agreement (TSA) can erode value, increase complexity and delay transformation. For private equity firms pursuing carve-outs, speed matters. The faster a business can stand on its own feet after completion, the faster value can be realised.
However, deals can all too easily become bogged down in lengthy TSAs; legal agreements where sellers continue to provide operational services to the business being sold for a limited period after completion. If not managed correctly, this can create an awkward and costly situation for everyone involved. Imagine selling your house but still having to help the new owners wash the dishes and vacuum the carpets. That is often what a TSA feels like for sellers during a carve-out.
It’s easy to see why compressing the timeline is attractive to both sides, but the challenge is balancing speed with stability. Moving too fast can pose risks to the stability of the newly created entity or even impact trading performance, undermining the investment case. Move too slowly, and the deal can become more costly, operationally cumbersome and frustrating for both parties.
The answer is not just moving faster but also knowing where and how to move faster, where to simplify and where specialist experience can help.
Why Sellers Often Want Shorter TSA Periods
TSAs are rarely attractive for sellers. They can create additional risk, leave businesses carrying stranded costs and require back-office teams to continue supporting operations they no longer legally own.
They also delay transformation plans within the retained business. Often, teams cannot be fully redeployed, restructured or reduced until the TSA period ends. Security and compliance considerations become more complicated, too, particularly when technology platforms remain interconnected after completion. That is why buyers who can demonstrate a credible plan to accelerate separation often gain a competitive advantage during the acquisition process.
The Most Overlooked Phase Of The Transaction
One of the biggest opportunities to shorten TSA timelines happens before completion takes place. In larger or more complex transactions, there is often a gap period between signing and completion while regulatory approvals, legal conditions and restructuring activities are finalised. Too many organisations treat this as dead time. Experienced transaction teams do the opposite. They use that window to complete discovery work, shape operating models, refine budgets and mobilise delivery teams before the deal closes. This way, by the time completion happens, execution can already be well underway.
This approach carries risk for buyers, however. Deals can still fall through before completion, just as a house purchase can collapse before contracts are exchanged. Yet, when managed correctly, the payoff can be significant. Teams avoid spending the first months of a TSA figuring out what needs to happen and instead focus on delivering it.
Independence First, Optimisation Later
One of the most common mistakes during a carve-out is trying to transform everything at once. A TSA exit is not the same as a full business transformation program. Successful carve-outs distinguish between what must happen immediately and what can wait until the business is stable. Being able to make that distinction can make an enormous difference.
A standalone business may not necessarily need the perfect customer relationship management platform, redesigned finance architecture and fully optimised operating model during the separation period. It needs continuity, operational stability and enough independence to function safely and effectively.
The businesses that move quickest often adopt a “minimum viable separation” mindset. They focus first on standing the business up successfully, with the right infrastructure, then move into longer-term optimisation once stability is established. This helps reduce operational strain and protects value creation plans from being overwhelmed by unnecessary complexity.
How Experience Compresses Timelines
Carve-outs demand an unusual combination of strategic thinking and operational delivery. Technology, finance, HR, procurement, legal, compliance and commercial teams all need to move in sync, often on demanding timelines. That creates enormous pressure on management teams, many of whom may never have led a separation before or seldom have the bandwidth to.
Experienced carve-out advisors have existing relationships with proven suppliers, which they know can deliver quality at pace. They know which systems can be replicated quickly and which decisions are likely to create delays later in the program. They know how to structure governance, where hidden dependencies typically sit and how to avoid common pitfalls.
Sometimes, the most valuable expertise comes from knowing what not to change. Replacing systems on a like-for-like basis during separation can reduce risk and accelerate delivery. In some cases, securing access to platform metadata alone can cut implementation timelines in half by preserving underlying business logic and workflows. These are practical lessons learned through repetition.
The Bottom Line
In closing, reducing TSA timelines should never become a race for its own sake. The strongest carve-out strategies focus on accelerating the right activities, simplifying where possible and protecting the investment case throughout the process. Because in mergers and acquisitions, unlike in most property transactions, completion does not always mean the relationship ends immediately. Sometimes you still need to keep the lights on in the house you just sold. The organisations that handle that transition best are usually the ones that prepared for it long before they picked up the keys.