2min chapter

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield cover image

Corporate Carve-Outs – Tips on Selling Part of Your Company

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

CHAPTER

The TSA Indemnification Cap in Carve Outs

Are you seeing that the cap in the indemnification cap related to the reps and warranties, that that's usually higher in a carve out just because the risk can be much greater than in a traditional acquisition? Yeah, I would say as a general matter, that the cap and those kinds of things probably a little bit higher in order to compensate for those things. And then the other big flights you have around that same concept is does that cap, which is usually contained in the purchase agreement, do that cap apply also to the TSA services agreement, or does the TSA kind of act on its own? So I think that's one of the bigger fights you get in between the buyer and the seller

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