Independent Sponsor Transition Services Agreements (TSA) in Auto Aftermarket
When the deal is auto aftermarket and the question is Transition Services Agreements (TSA), the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
The economics on a auto aftermarket platform deal usually hinge on a handful of structural decisions. Transition Services Agreements (TSA) is one of them.
The typical auto aftermarket platform sits at $8M to $90M EV with EBITDA in the $2M to $16M range. The thesis runs on service-center or specialty-shop regional roll-ups. Technician shortage is the single biggest valuation risk. Underwrite the bench, not the bays.
How Transition Services Agreements (TSA) actually gets structured.
Define every service with measurable inputs, outputs, and durations.
Price each service at actual cost plus a defined margin.
Set termination rights for both sides, with notice periods.
Address data privacy and security obligations across the transition.
In auto aftermarket, layer in technician retention pool defined and funded as part of the Transition Services Agreements (TSA) workstream.
Writing a generic TSA. Every line in a TSA is a future dispute waiting for definition.
"A good TSA reads like a SLA. A bad TSA reads like a memo."Jason Powell · Transition Services Agreements (TSA)
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
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An LOI on the desk, a auto aftermarket target, and a Transition Services Agreements (TSA) question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.