The buyer must indicate contractual restrictions related to the services provided to the acquired business. As has already been mentioned, some services may have been provided under agreements over the entire framework and must be divided into different contracts. Contracts may provide services to multiple parties, while these parties are considered related parties, but do not allow multiple parties to use the Services as soon as there is no longer an affiliate relationship. In addition, the buyer will want to identify all contracts that involve restrictions on the use of services by third parties or confidentiality restrictions that would prohibit a buyer from sharing with the seller the information necessary to provide the services. The buyer should begin to identify the type and type of transition services he or she needs while performing due diligence for the transaction to be acquired. As part of due diligence, all intercompany or affiliate agreements should be identified and the buyer should inquire about the services (if any) that the acquired business receives from related businesses. In addition, if the acquired business is a division, the buyer should ask the seller for information about the total business resources assigned to the business to be acquired, including human resources, finance and accounting, information technology, logistics/purchases and payroll. Cost allocation information is also useful in determining what should be calculated for transition services. Many acquisitions include the seller and his related companies that provide services to the buyer and his related companies for a limited period after the closing of the transaction in order to change the transaction to be acquired.
These transition services vary considerably in terms of the size and duration of the services provided. For example, acquiring a business that is currently managed as a division of a larger company may require significant transition services, while acquiring a stand-alone business does not require transition services. Workers` issues should be given special attention, as these positions may require significant delays. Workers may be required to formally change employers as part of the transaction and possibly change existing insurance or benefit agreements or obtain new insurance coverage. The full scope of staff business that may be affected goes beyond this article; However, as part of its due diligence, the purchaser should determine and consider any changes that may be required to change the staff of the business acquired at the end of the year. Services currently provided by a third party to the acquired business must be identified, as these services may require additional time for the transition. For example, if the acquired business currently uses an external salary manager, the administrator must be notified before closing to ensure that salary processing is done without interruption. The acquired business may also have to enter into new agreements with certain third parties when the services provided prior to the conclusion were covered by ad-fitting agreements covering several companies and not just the acquired activity. Careful identification of the scope and nature of the services to be provided and advance transition planning allow the purchaser to gain greater control over the integration process and identify barriers prior to closure.
By reflecting on transitional benefits from the initial due diligence phase, the purchaser can better prepare to effectively transform the transaction acquired at the close and to continue the transaction in the same way as before the acquisition. The buyer is much more willing to accept this risk if he has internal resources to fill any gaps in the services provided by the seller.