The specific cost takeout moves that actually land.

Move one: service catalog rationalization. Cancel what Newco does not need.

The first cost takeout move is service catalog rationalization. The seller's TSA service catalog reflects the seller's view of what Newco needs, often built quickly during deal negotiation. Two months into the TSA, the Newco team has a much better view of which services actually matter. Some services are unused. Some are over scoped. Some are duplicates of capability Newco has internally.

The rationalization work starts with a usage audit. Every service in the catalog gets evaluated: actual consumption, business value to Newco, replacement cost, descoping risk. Services with low consumption and low replacement risk are candidates for cancellation. Services with moderate consumption may be candidates for reduced scope.

The seller usually accepts descoping requests because they reduce the seller's TSA obligation. The negotiation is over the credit. Most TSAs include language on how cost reductions flow back to Newco when services are descoped. The buyer-side advisor pressure tests the credit calculations to make sure Newco gets the full economic benefit.

Catalog rationalization typically captures five to ten percent of TSA cost in the first ninety days. It is the easiest of the moves and should always be the first one. The work pairs with TSA service catalog rationalization.

Move two: pass-through audit. Make the seller prove the math.

The second cost takeout move is the pass-through audit. Third-party costs that flow through the TSA on a cost-plus basis are systematically overcharged on most carve-outs. Volume allocations get done with old methodologies. Mark-ups creep above the contracted cap. License costs reflect enterprise pricing when Newco scale would support lower pricing.

The audit picks a sample of pass-through invoices over the first six months of the TSA and reconciles them to the underlying vendor agreements, the TSA cost-plus terms, and the actual Newco usage. The audit produces a list of discrepancies, each with a quantified financial impact and a recommended remedy.

Most sellers accept the audit findings on the discrepancies that are technically clear. Overcharges get credited. Volume allocations get corrected. Mark-ups get adjusted to the contracted cap. The recovered amounts often run from one to three percent of total TSA spend, with the larger benefit being avoided future overcharges from corrected methodologies.

The buyer-side advisor leads the audit work because it requires both contract reading and finance forensic skills. The operating partner authorizes the audit as part of the standard portfolio retainer scope. The work pairs with TSA overcharge identification.

Move three: cost-plus mark-up renegotiation. The mark-up is negotiable mid-TSA.

The third cost takeout move is renegotiating the cost-plus mark-up. Many TSAs include a mark-up of ten to twenty percent on pass-through costs to compensate the seller for the administrative work of managing the third-party relationships. The mark-up gets set during deal negotiation, often without much pressure testing.

Mid TSA, the seller's actual administrative work on the pass-through is often less than the mark-up suggests. Some categories require minimal effort. Some categories the seller is already going to manage for its own enterprise use. The buyer-side advisor builds the case for a tiered mark-up that reflects actual effort by category.

The renegotiation requires leverage. The buyer-side advisor times the conversation to coincide with a moment when the seller wants something from Newco, such as a TSA extension, a scope expansion in a different area, or a settlement on a disputed item. The mark-up adjustment becomes part of the package, not a one sided ask.

A successful mark-up renegotiation can save two to five percent of pass-through cost across the remaining TSA period. The work pairs with TSA mark-up benchmarks.

Move four: vendor renegotiation under TSA cover. Different terms once Newco is the customer.

The fourth cost takeout move is direct renegotiation of vendor contracts as Newco takes over the contract relationships. The TSA period is when Newco transitions from buying through the seller to buying directly from the vendor. The transition is also when Newco can rewrite the contract terms.

Newco typically renegotiates around three dimensions. First, term length: shorter commitments to preserve flexibility. Second, price: Newco scale pricing rather than enterprise scale. Third, commercial terms: payment terms, audit rights, service levels, exit options.

Some categories see significant price reductions, particularly software licenses where the seller's enterprise pricing was actually subsidizing other parts of the enterprise. Other categories see less price movement but better commercial terms. Either outcome is value capture if the negotiation is run thoughtfully.

The operating partner reviews the renegotiation campaign portfolio quarterly. Which vendors got renegotiated, what savings were captured, which still need work. The work pairs with operating partner TSA vendor management.

Move five: exit acceleration. Each month of acceleration saves a TSA fee.

The fifth cost takeout move is accelerating TSA exit. Every month the TSA runs costs the TSA fee plus the indirect operating cost of constrained Newco operations. Compressing the TSA period from eighteen months to twelve months captures six months of TSA fee avoided plus the value of six earlier months of operational independence.

Acceleration moves are concrete. Parallel running of workstreams that were planned sequentially. Investment in additional buyer-side advisor capacity to drive seller dependencies. Earlier hiring of standalone capability so build out starts faster. Earlier scoping of vendor consent work so consent issues do not appear at the eleventh hour.

Acceleration also requires the operating partner to make trade off calls. Faster exit usually requires more spending earlier. The buyer-side advisor builds the case showing the net economics: incremental acceleration cost versus avoided TSA fee plus value of earlier operational independence. The operating partner approves the acceleration plan based on the math.

Operating partners who push for exit acceleration routinely capture three to six months of compression on the original TSA plan. The work pairs with operating partner TSA exit planning.

Moves six and seven: stranded cost elimination and infrastructure consolidation. The post exit savings start during the TSA.

The sixth move is stranded cost elimination. Carve-outs leave behind costs that no longer have a productive function: under utilized real estate, oversized infrastructure, redundant licenses, retained employees with no role. The TSA period is when these stranded costs get scoped and the elimination plan gets set in motion.

Stranded cost work can usually start six to nine months before TSA exit because the Newco team has enough visibility by then to size the post exit footprint. The work runs in parallel with the exit planning. By the time the TSA exits, the elimination plan is ready to execute. The savings show up in months two and three post exit rather than waiting another six months.

The seventh move is infrastructure consolidation. Newco often inherits an infrastructure footprint sized for the seller's enterprise. Cloud capacity, network bandwidth, data center space, backup storage. The TSA period gives Newco time to right size these allocations before standalone exit, capturing the savings as part of the standalone target operating model.

Combined, the stranded cost and infrastructure consolidation moves can deliver savings of five to fifteen percent of the post exit operating cost. The work pairs with TSA stranded cost elimination.

More for operating partners.

For the full exit sequence behind these plays, start with the TSA exit strategy pillar. For the management team view, see how the firm works with portfolio companies.