Carve-Out Diligence: Fortier on TSAs, Gaps, and Vendor Traps
Danielle Fortier explains how pre-LOI gap analysis and structured TSA schedules protect carve-out buyers from hidden post-closing cost explosions.
The Vendor Trap That Derails Corporate Carve-Outs
With Kison Patel, Danielle Fortier · Sunday, October 11, 2026
Danielle Fortier, partner at Cooley, discusses why corporate carve-outs are surging amidst valuation gaps and breaks down the operational entanglements that frequently derail these transactions. She highlights the risks of underpriced vendor contracts, explains how to structure transition service agreements (TSAs) at the LOI stage, and outlines Cooley's framework for conducting pre-closing gap diligence. Fortier also analyzes how artificial intelligence has shifted intellectual property priorities, making source code separation easier in modern software deals.
Key takeaways
- Corporate carve-outs are accelerating as valuation disconnects freeze broad platform sales, prompting corporate parents to shed non-core divisions to free up capital. Read more →
- Danielle Fortier, partner at Cooley, observes that generative AI has removed historical resistance to copying and sharing proprietary codebases in corporate carve-outs. Read more →
- Letter of intent terms that specify a transition service agreement without setting exact duration routinely produce clashes, with sellers anticipating a 3-month exit while carve-out buyers require 18 months. Read more →
- Buyers obsess over customer contracts and top-line recurring revenue while routinely ignoring the shared back-office software that powers the carve-out target. Read more →
4 articles from this episode
Why AI Is Ending Codebase Battles in Tech Carve-Outs
Cooley partner Danielle Fortier explains how generative AI killed source code sensitivity in tech carve-outs and shifted deal value to distribution.
Why TSA Misalignment at LOI Derails Carve-Out Economics
Danielle Fortier explains why failing to lock down TSA duration and at-cost pricing at the LOI stage threatens carve-out returns and closing certainty.
Why Carve-Out Diligence Misses Shared Vendor Contracts
Danielle Fortier explains why shared vendor contracts and cloud infrastructure create hidden post-closing costs in corporate carve-outs.
More M&A Science episodes
- How Jerry Cedicci Buys a Business With No Down PaymentOct 4 · 5 articles
- The Man Who Taught Kison Patel to See M&A OpportunitiesSep 27 · 5 articles
- The Man Who Taught Kison Patel to See M&A OpportunitiesSep 27 · 6 articles
- Why M&A Integration Fails Without Leadership EnablementSep 13 · 6 articles