Tool

Carve-Out Perimeter & TSA Planner

Define what transfers, map seller dependencies, plan temporary services and their exit, and separate Day 1 readiness from independent operations.

What this helps you decide

What is being sold, what remains entangled, and how will the business operate independently?

The decision this tool answers

Download the Carve-Out Perimeter & TSA Planner workbook · Excel · Version 1.0 · USD thousands

A carve-out separates a business from a larger organization. The operating business may depend on people, systems, contracts, facilities, and decision rights that sit outside the proposed sale.

This planner asks: What is being sold, what remains entangled, and how will the business operate independently? It connects the sale perimeter to the work customers depend on, identifies temporary seller support, and keeps separation costs and readiness decisions visible.

When to use it

Use it when defining a carve-out, during diligence, before agreeing the separation obligations, and in the run-up to closing. Continue reviewing it after close until the temporary services have been exited and the receiving business can operate independently.

What to bring

Bring the proposed entity and asset perimeter, organization chart, key customer and vendor agreements, system and data inventory, shared-service descriptions, and a walkthrough of the critical workflows. Add the proposed closing date, service terms, cost estimates, receiving owners, and the documents or test results that support each readiness assessment.

Missing material belongs in the next-action list with an owner. The first pass should expose what the team still needs to know.

Start with one customer promise

Use the first 15 minutes to follow one important product or service from customer order through delivery, billing, and cash collection. Name the people, systems, permissions, and facilities that make it work. Then ask what would stop if the seller disconnected tomorrow.

Record those dependencies before trying to complete every row. A useful first pass produces a specific unresolved dependency, an accountable owner, and the next piece of evidence needed. Expand the scope across the business before treating the readiness view as complete.

Define the perimeter explicitly

The perimeter is the boundary of the sale. Record what is included, excluded, shared, or unresolved. Cover legal entities, people, contracts, customers, vendors, systems, data, intellectual property, facilities, shared services, and critical workflows.

Identify the present owner, the receiving owner, the proposed treatment, required consents or access rights, and the evidence for the assessment. A customer relationship is different from a transferable customer agreement. Access to software or data is different from owning it. An employee role is different from a confirmed transfer or replacement.

An excluded item can still be essential to the business. Connect it to a replacement or temporary service. An unresolved boundary remains a finding that may change the separation plan or the transaction.

Connect assets to the work they support

Use one dependency record for each workflow and the asset or service it needs. Several dependencies can support one workflow, and one shared service can support several workflows. Preserve the IDs so the connections remain traceable.

Name the workflow owner and define the result that must continue: payroll paid correctly, orders fulfilled, customers supported, invoices issued, or cash collected. Record the expected number of required dependencies and review the completeness of that map. A short list that omits the payment system should not appear ready because its other entries are complete.

Test normal work and important exceptions. A procedure or a successful login does not establish that the receiving team can complete the customer promise.

Separate Day 1 continuity from independence

Day 1 continuity means the business can perform the required work at close, using transferred resources, replacements, or documented temporary seller support. It needs accountable owners, appropriate access and permissions, and evidence that the operating path has been tested.

Independence means the business can perform that work without the temporary seller service. It needs a replacement capability and its own successful exit test. A service available on Day 1 can remain a major separation risk months later.

The workbook keeps these assessments separate. It checks entered prerequisites and dates; it cannot inspect evidence, discover an omitted dependency, establish legal rights, or approve closing. Reconfirm the map when the perimeter, closing date, or operating plan changes.

Make each TSA service specific

A transition services agreement, or TSA, describes services the seller will provide temporarily after closing. A useful service schedule states what is provided, to whom, by whom, at what standard, for what price, and for how long.

Record scope and exclusions, the seller service owner and buyer receiving owner, service dates, pricing basis, and the milestone for replacing it. Define the operational evidence needed to accept the service at close and to exit later. Put important limits, escalation routes, dependencies, and notice requirements in the service basis and action notes.

Do not assume a general promise of “IT support” includes application licenses, data migration, cybersecurity monitoring, change requests, or access for new employees. Specify the service boundary with the people responsible for delivery and the transaction advisers.

Keep the service record separate from its dependency links. If one payroll TSA supports three workflows, its fee belongs in the service budget once.

Plan the exit while negotiating the service

For each TSA, identify the replacement capability, its owner, the work remaining, the target exit date, and the test that will demonstrate readiness. Work backward from service expiry and any required termination notice.

Review the chain of dependencies. A replacement system may be installed but still depend on the seller's data extract, identity service, or reporting process. A completed technical milestone does not establish that the full business workflow can operate independently.

If the replacement will be late, name the consequence and the response: accelerate the work, agree a documented extension, provide an alternative, or change the transaction plan. An extension is a matter to agree; an additional budget allowance does not create a right to continued service.

The workbook calculates contract end as the start date plus the entered whole months, less one day. It calculates the notice deadline from that end date and the entered calendar notice days. Reconcile that planning convention with the negotiated agreement. An exit beyond the base term or a passed notice deadline calls for review.

Keep four cost views separate

Buyer standalone costs: recurring costs needed to run the separated business, such as replacement finance staff, software, or insurance.
Seller stranded costs: recurring costs left behind after the divestiture that do not disappear with the sold business.
Separation costs: one-time work needed to separate, such as migration, duplicate environments, contract transition, or relocation.
TSA charges: temporary service payments under the agreed service period.

State who pays and the basis for each estimate. Seller stranded costs are not automatically buyer costs. Costs already counted in the operating forecast or another separation line should not be added again.

Compare the standalone run rate with a reconciled business baseline separately. This planner organizes cost estimates; it does not calculate normalized EBITDA, a purchase-price adjustment, tax, financing capacity, or a full monthly cash forecast. Carry the accepted assumptions into the deal model and funding plan.

Amounts are USD thousands. TSA charges use a fixed monthly fee multiplied by the whole-month base term, counted once per service. Annual run rates and one-time amounts remain separate. Entered subtotals include structurally valid Assumption estimates; invalid entries are excluded and flagged. Review both the totals and the open evidence count.

The TSA estimate covers the full base term. A planned early exit does not reduce it. Variable fees, taxes, escalation, extensions, proration, and negotiated early-termination economics require separate treatment.

Use the workbook in seven steps

Dashboard: set the review and closing dates and record the scope review.
Workflows: identify critical operating results, owners, completeness reviews, and tests.
Perimeter: define the assets, people, rights, and services within or outside the sale.
Dependencies: connect the workflows to what they need for Day 1 and independence.
TSA: enter each temporary service once, with its terms, owners, replacement milestone, and exit evidence.
Costs: record non-TSA recurring and one-time estimates in the appropriate categories.
Guide: check field definitions and limits, then return to Dashboard to identify the next action.

Replace the fictional entries labeled Assumption with the transaction's actual facts and evidence. Keep blank or unverified conditions open. Do not turn a missing record into a pass by reducing the declared scope.

The reserved capacity is 10 workflows, 22 perimeter records, 40 dependency links, 10 TSA services, and 20 non-TSA cost records. Use full-table sorts and preserve the IDs. Extending beyond the reserved rows requires updating the formulas, tables, validations, and Dashboard references.

After a material change to the scope, closing date, dependency, service, cost, or acceptance test, increment the current plan revision on Dashboard. Reassess affected records and renew the scope review. The workbook reopens evidence when reviewed revisions differ; it does not increment the plan revision automatically.

Convert the finding into a transaction decision

Investigate a missing consent, unsupported cost estimate, or untested dependency. Price a supported change to recurring costs or separation funding. Protect continuity through a workable transition plan, service commitment, or closing condition. Walk when a critical capability cannot transfer or be replaced on acceptable terms.

Give the action a named owner and date. Escalate critical gaps to the person responsible for the next commitment. A favorable overall readiness count cannot cancel a workflow that prevents customers from being served or employees from being paid.

Common mistakes to avoid

Treating a legal entity list as a complete map of the operating business.
Assuming a shared contract, license, employee, or data set transfers because the business uses it today.
Calling Day 1 ready while the seller still needs to agree the service or provide access.
Calling a TSA exit complete when the replacement system works but the full workflow has not been tested.
Counting a shared TSA fee once for every workflow, or adding the same cost in both the TSA and separation budgets.
Assuming an extension is available because more time or money has been put in the plan.

Carry the separation plan through the deal

Start with Before You Buy: Follow the Work to test the business and its dependencies. Carry material funding and risk allocation questions into the LOI Economics & Risk Allocator.

Use After the Deal: Keep the Business Working for the broader integration and Day 1 program. Keep buyer-created benefits and their delivery costs visible in the Synergy Underwriting & Value Bridge. The M&A Deal Workflow keeps the decisions connected from mandate through value delivery.

Version

Version 1.0. Updated September 10, 2026. Editable Excel workbook. Entries stay in your downloaded copy.