Transitional Service Agreement Francais

Among the various factors that contribute to the functioning of the objective, information systems play a central role. Their complexity, the different elements (software, equipment, specific developments, etc.) and the data they process often complicate the organization of transition and separation. The development of an information system takes time, so it is recommended to create a contract for transition services to ensure the scope, quality and sustainability of these services after the transfer. The reorientation of the IS assumes at the same time that, during the migration phase, IT services are provided for the time being, allowing the division or the divested company to ensure the continuity of its activities. Design and manage transition service agreements to achieve a fast and clean separation has been saved Transitional service agreements can be extremely difficult to manage if they are not properly defined. Usually, poorly drafted TSAs result in disputes between the buyer and the seller centered around the scope of services to be provided. The M-A activity was sustained in 2019 despite the instability of the economic environment. At the beginning of the year, many players are continuing their search for ways to increase their market share in France or abroad. In many areas, the consolidation strategy remains the key driver of transactions, which are also the objective of restructuring group debt.

Today even more than in the past, in various sectors such as heavy industry, pharmaceuticals, agri-food and services, large groups divest activities or production units in carve-out activities (through common assets or contracts) for various reasons:a) Carve-out allows companies to focus on their core or core activities and to separate themselves from activities that are not included in their business. Overall strategy. This helps to better orientate their activities and strengthen the agility of management at both the parent company and the reoriented company.b) The carve-out allows over-indebted companies to draw a price from the sale of part of their business to reduce their debt.c) The carve-out also allows certain groups to separate from low-performing activities , or even in deficit. « Core-Business, » which they can`t turn around in the situation and focus on the profitable business they want to preserve. Some investors, funds or companies, express interest in transactions that are convinced of their ability to clean up the business. In such complex situations ( « distressed M-A »), the transaction is sensitive to both the assignor and the assignee: when a subsidiary or industry withdraws from a group to be acquired, the acquirer must negotiate a transitional contract (TSA) or a transitional service contract essential to the management of the development of information systems. Krys is a Director in Deloitte`s Integration – Separation Advisory team in Zurich.