TSA Pre-Signing Review
Untangle dual dependency before formation.
Fixed-fee review in 48 hours. Senior team on day one. The first conversation is always free.
A joint venture TSA is rarely a single agreement. When two parents contribute businesses or assets to a shared entity, the new venture often takes services from both, under terms each parent wrote to protect itself. Untangling that dual dependency is the heart of a joint venture TSA exit strategy, and it is more complex than any single seller carve-out.
Most TSAs have one provider. A joint venture often has two, because each parent contributes a business that ran on that parent's shared services. The venture inherits IT from one parent, finance from the other, and a patchwork of arrangements that reflect how the contributed assets were run before, not how the venture needs to run now. The result is a service map with two centers of gravity, each pulling its own way.
Each parent's incentive is to protect its own position. A parent providing services to the venture wants fair recovery and limited exposure, and it has a seat at the venture's table that a pure seller would never have. That governance link means service disputes are entangled with venture politics. A disagreement about an IT charge is not just a TSA issue, it is a shareholder issue between the two parents.
The venture's own interest can get lost between them. Its management may be seconded from the parents and may feel loyalty to its old employer rather than to the new entity. Establishing that the venture has its own interest in cheap, fast, clean services, distinct from either parent's interest, is the first governance challenge of a JV TSA.
The foundational work in a JV is a complete map of which parent provides what. Because the venture is assembled from two contributions, the dependency map is genuinely complicated. Some functions come entirely from one parent, some are split, and some are duplicated where both parents contributed overlapping capability. The venture cannot plan an exit it has not first fully mapped.
Duplication is both a problem and an opportunity. Where both parents provide a similar service, the venture eventually has to choose one path or build its own, and the transition is a chance to rationalize rather than simply inherit. But during the TSA period the duplication is cost, and the venture should identify it early and plan to collapse it rather than pay two parents to do one job.
Interdependencies between the two parents' services are the hidden risk. A finance process from one parent may rely on data from an IT system the other parent runs. When the venture exits one parent's service, it can break a process that depends on the other's. The map has to capture these cross dependencies, because a JV exit sequenced without them creates failures neither parent will own.
JV governance is the defining difficulty. The parents that provide the services also control the venture, which means the providers and the customer's owners are the same parties. A normal TSA pits an independent buyer against a seller. A JV TSA has the providers sitting on both sides of the table, and the venture's own interests can be squeezed out entirely.
The structural answer is to give the TSA its own governance separate from the JV board, with clear rules for how service disputes are resolved without becoming shareholder fights. Pricing methodology, SLA terms, and exit rights should be set in the venture agreement at formation, when the parents are aligned on getting the venture going, rather than left to be negotiated later when their interests have diverged.
The venture also needs its own voice. Management that is genuinely accountable to the venture, not just seconded from the parents, makes better service decisions. Where that independence is weak, an external buyer-side perspective helps the venture see where it is paying too much or depending too long on a parent that has no incentive to let it become self sufficient.
Pricing a JV TSA has to be fair not just to the venture but between the two parents, which adds a layer no single seller deal has. If one parent provides more services than the other, or charges a higher mark-up, the imbalance becomes a source of tension between owners who also have to cooperate on running the venture. The cleanest approach is a single consistent pricing methodology applied to both parents' services.
Cost-plus mechanics still need scrutiny on each side. Each parent will allocate its costs to the venture using its own methods, and those methods can differ enough to create unfair outcomes. The venture insists on transparent allocation and audit rights for both providers, and on a consistent mark-up, so that neither parent is recovering more than its true cost at the venture's or the other parent's expense.
Because JV TSAs often run long, 12 to 36 months is common, small pricing imbalances compound. The venture builds exit incentives that apply equally to both parents' services, so the path always points toward the venture standing on its own rather than remaining a profit center for either owner.
The endgame of a JV TSA is a venture that runs on its own systems and depends on neither parent. That is harder than a normal exit because the venture is migrating off two providers at once, often onto a single new platform it has to build from scratch. The exit plan is really a build plan for an independent company, sequenced to collapse the dual dependency safely.
Sequence the exit around the cross dependencies the map revealed. Functions that both parents touch, or that chain between the two, have to migrate in a careful order so that exiting one provider never breaks a process still running on the other. This is where a JV exit most often goes wrong, and where disciplined dependency mapping and gate reviews earn their place.
Treat the exit as the moment the venture becomes a real company. Govern it as a program with its own leadership, accountable to the venture rather than to either parent, and track it against the date the venture no longer needs either owner to operate. Pre-signing scoping of both parents' service catalogs, the kind our TSA Pre-Signing Review delivers, is what makes that date credible before the venture is even formed.
A JV often takes services from both contributing parents, so it has two providers with two sets of incentives instead of one seller. The dependency map is complicated, functions can be duplicated or chained across both parents, and the providers also sit on the venture's board. Untangling that dual dependency is harder than any single seller carve-out.
Separate TSA governance from the JV board, with clear rules so service disputes do not become shareholder fights. Set pricing methodology, SLA terms, and exit rights in the venture agreement at formation, when the parents are aligned, rather than later when their interests diverge. Give the venture its own accountable management so its interests are not squeezed out between the owners.
Apply a single consistent pricing methodology to both parents' services, with transparent cost allocation and audit rights on each side and a consistent mark-up. If one parent charges more or allocates differently, the imbalance becomes tension between owners who also have to cooperate. Because JV TSAs often run 12 to 36 months, small imbalances compound, so build equal exit incentives for both providers.
The venture migrates off two providers at once, often onto a new platform it must build from scratch, and the two parents' services frequently chain together. Exiting one provider can break a process still running on the other. Sequence the exit around the cross dependencies, use gate reviews, and govern it as a build program for an independent company accountable to the venture, not the parents.
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