ERP licences in a carve-out: negotiate early instead of paying late

In a carve-out, it is often licensing law rather than technology that determines the timeline. Whether a divested business may continue to use its ERP is set out in the contract between seller and vendor, not in the purchase agreement.

The questions before signing

• Does the licence agreement permit use by a company outside the group, even on a transitional basis?
• Is the vendor's consent required, and how long does it typically take?
• Which licences does the buyer need to acquire, and at what price?
• What happens to data and clients when the usage ends?

Why this belongs in the TSA

If the TSA provides for system use that is not covered by the licence, both sides are exposed to risk. A clear provision protects buyer and seller and prevents back-claims.

The practical route

Build the licence inventory early, involve the vendor early, assess alternatives in parallel. For smaller specialist applications, a rebuild is often faster than a licence negotiation.