Reverse TSA. The contract that runs the other way.

In a clean spin or whole company divestiture, only the forward TSA exists. The seller serves Newco until Newco is independent. In a partial carve-out, where the business unit being sold owned shared platforms or shared people, the seller still needs services from the entity it just sold. That is the Reverse TSA.

Typical Reverse TSA scope includes payroll processing for stranded employees still on the carved-out HRIS, hosting for applications still running on platforms that left with Newco, finance system access for closing out historical reporting, and IT support for office locations shared during transition. Term is usually shorter than the forward TSA, but the operational burden on Newco is real and frequently underpriced at signing.

The risk for a buyer is asymmetric. The forward TSA gets pressure tested in diligence. The Reverse TSA often does not. Newco signs commitments to serve the seller without scoping the labor cost, the platform cost or the management distraction. Pricing is sometimes embedded inside the broader TSA pricing exchange and is rarely benchmarked. A buyer-side review of the Reverse TSA is as load bearing as the forward review.

Where the term appears

As a separate exhibit to the purchase agreement, usually next to the forward TSA. In service catalogs that list buyer obligations rather than seller obligations. In Day One operating model planning, where Newco resourcing has to absorb both running the business and serving the former parent. In governance committee meetings, where Reverse TSA scope creep is a common buyer side complaint. In disputes, where the seller treats the Reverse TSA as a backstop and Newco treats it as a distraction.

Related terms

Transition Services Agreement · Service Catalog · Carve-Out · Newco · SLA