Transitional Services Agreement Definition

Where a business is sold as part of an M&A transaction and the seller is expected to continue to provide support services to the post-closing business, the parties to the transaction enter into a transition services agreement (TSA) governing the provision of such services to the post-closing business. Depending on the complexity of the transitional service agreement and the criticism of the services provided, TSAS can range from short back-office administrative service agreements, with an agreement on setting fees in the future and without formal service standards, to full service agreements with a defined scope, service levels, variable pricing agreements and detailed data security and data protection rules. .