Divestiture checklist: from perimeter to TSA exit, with a records and data step

Why this divestiture checklist adds a records step

Divesting a business unit means drawing a line through things that were built to be shared: people, contracts, systems and data. Most checklists treat data as an IT migration task. That misses two decisions that cannot be reversed after cutover: which party keeps which historical records, and whether any of that history should be preserved, retained or licensed before the old environment is switched off.

Use the checklist below as a working document for the deal team, corporate development and the separation management office. The Phase 4 items are the additions.

The divestiture checklist, phase by phase

Phase 1: strategy and perimeter

• Board or investment committee approval of the rationale and the exit route: sale, spin-off, joint venture or wind-down.
• Perimeter defined: legal entities, sites, products, people, contracts, IP and systems in scope.
• Deal structure chosen (asset sale or share sale), with tax and legal input.
• Shared assets listed, with a first view of what transfers, what stays and what is shared under a transition services agreement.
• Separation management office staffed, with a named owner for each workstream.

Phase 2: carve-out financials and the value story

• Standalone carve-out financial statements, including allocated corporate costs.
• Stranded costs identified for the parent, with a reduction plan.
• Standalone cost model for the buyer, covering functions the unit currently borrows from the parent.
• Sell-side quality of earnings review.
• Equity story and buyer universe agreed.

Phase 3: people and contracts

• Transferring employee list, retention arrangements for key staff and consultation requirements by jurisdiction.
• Customer and supplier contracts mapped as dedicated, shared or to be split.
• Change-of-control and anti-assignment clauses flagged, with a consent plan.
• Shared licenses for software, patents and trademarks mapped, with license-back or transition terms.

Phase 4: IT, data and records (the added step)

• System inventory for the unit: ERP, CRM, ticketing or PSA, email, chat, file shares and engineering tools, with the years of history in each. Shared instances, such as a PSA platform used across business units, need their own split plan.
• Data perimeter drawn: which records belong to the unit, which stay with the parent and which both sides need.
• Retention obligations listed: legal holds, tax and regulatory retention, litigation files.
• Rights review completed: customer contracts, supplier agreements, employee notices and privacy policies checked for limits on how unit records may be used.
• Personal data mapped by jurisdiction, including any data about people in the EU.
• Licensing decision recorded: whether the unit's operating history could be licensed for AI training before closing, by the buyer after closing, or not at all.
• Complete exports taken and test-restored before any system is decommissioned or migrated.
• Purchase agreement language on records drafted: who keeps copies, permitted use of retained copies and any license rights either side reserves.

Phase 5: marketing, diligence and signing

• Teaser, CIM and management presentation.
• Virtual data room, with clean-team rules for competitively sensitive data.
• Buyer selection that weighs price, certainty and separation capability.
• Purchase agreement, disclosure schedules and transition services agreement negotiated together.

Phase 6: closing and TSA exit

• Closing conditions, consents and notices tracked; the M&A closing checklist covers the mechanics.
• TSA service schedule, pricing, term and exit milestones agreed.
• Data migration to the buyer completed and reconciled.
• Parent-side copies of unit data handled as the purchase agreement requires.
• Legacy systems decommissioned only after exports are verified and retention duties are met.

How to use the results

Records, rights and the licensing option

Divestitures often separate rights that used to sit together. US copyright law lets ownership be transferred in whole or in part, and any of the exclusive rights can be transferred and owned separately (17 U.S.C. § 201), so the purchase agreement can allocate who keeps what in the unit's documents and data. Decide that on purpose rather than by default; the question of who owns company data after an acquisition is far easier to answer when the agreement spells it out.

Privacy promises travel with the data. FTC staff have warned that quietly changing terms of service or a privacy policy to permit new uses, such as AI training, could be unfair or deceptive (FTC Office of Technology, February 2024). If the unit holds personal data about people in the EU, the GDPR can apply even to a US seller. Check what the original notices promised before anyone plans a license.

This is general information, not legal, tax or financial advice. Deal counsel and privacy counsel should confirm how these rules apply to the specific separation.

On the licensing side, the licensing company is whichever entity holds the rights when the license is signed: the parent before closing, the buyer afterward. That entity has to meet the baseline on the who qualifies page: a US company with 50+ full-time employees at peak (contractors excluded), several years of documented operations, rights to license the data and an authorized sponsor. It keeps ownership, approves the scope and signs only if the terms work.

Red flags in the records step

• Systems scheduled for shutdown before anyone has confirmed a complete export.
• A TSA that ends data access before migration has been reconciled.
• Unit records stored inside customer tenants or a former parent's systems.
• Archives already deleted, or backups nobody has tried to restore.
• Consumer or health data with no clear licensing basis.
• No one at the unit able to run exports or own the inventory.

Next step

Add Phase 4 to your current separation plan and give it an owner. If the unit's records look like a licensing candidate, register as a partner to make the introduction; partners introduce and share basic fit information only and never handle records. Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, payable only once the buyer pays and SourceX receives its fee; no reward is guaranteed. Check your own engagement letter, firm policy and any professional or securities rules on referral fees and disclosure before registering. For an industrial carve-out, the guide to selling a manufacturing business shows which office records are worth preserving.