A Transition Service Agreement (TSA) is a legal document that outlines the terms and conditions under which a company or organization (the "service provider") agrees to offer and manage certain services to another company or entity (the "service recipient"). The purpose of a TSA is to facilitate the smooth transition of services from one entity to another during a merger, acquisition, or divestiture. The primary goal of a TSA is to ensure that the service recipient can continue to operate without any disruption while it establishes its own support functions or transitions to a new service provider. This agreement is temporary and typically ranges from a few months to a year, allowing the service recipient to gradually assume control and management of the services being provided. There are several types of Transition Service Agreement examples, each serving a specific purpose: 1. Information Technology (IT) Transition Service Agreement: In the case of a merger or acquisition, the acquiring company may need to rely on the existing IT infrastructure, systems, and support of the acquired company for a certain period. An IT TSA ensures the smooth transition of IT services, including hardware, software, network infrastructure, and technical support. 2. Human Resources (HR) Transition Service Agreement: During a merger or acquisition, a company may require support in HR functions, such as payroll, benefits administration, employee onboarding, and policy management. An HR TSA ensures the continued provision of these services until the acquiring company establishes its own HR processes. 3. Facilities Management Transition Service Agreement: In situations where a company is transitioning its physical locations or divesting certain assets, a facilities' management TSA is necessary. This agreement allows the service recipient to utilize existing facilities, maintenance services, security systems, and utilities until it can independently manage its own facilities. 4. Finance and Accounting Transition Service Agreement: In mergers or acquisitions, the acquiring company may require assistance with financial functions, such as bookkeeping, financial reporting, accounts payable/receivable, and tax compliance. A finance and accounting TSA ensures the smooth transfer of these services until the acquiring company can establish its own finance function. 5. Supply Chain Transition Service Agreement: When a company is transitioning its supply chain operations, including procurement, inventory management, and logistics, a supply chain TSA becomes crucial. The agreement outlines the terms for the continued provision of these services until the service recipient can implement its own supply chain processes. In summary, a Transition Service Agreement provides a structured and temporary arrangement between a service provider and a service recipient to ensure a smooth transition of services during a merger, acquisition, or divestiture. The different types of SAS, such as IT, HR, facilities management, finance and accounting, and supply chain, cater to specific functional needs during the transition period.