Cybersecurity for Mergers and Acquisitions (M&A)

If you’re considering a merger or acquisition, risk mitigation is crucial. What you don’t know about cybersecurity and compliance can hurt you. Even with insurance or financial indemnification, this lack of awareness can cause problems that impact your organization. For example, cybersecurity breaches might hurt your brand’s image, while poorly understood compliance requirements could cause issues with the government. To help you avoid negative outcomes, ProCircular’s experienced team offers cybersecurity for mergers and acquisitions, providing expert insights for either party during a transaction.

M&A cybersecurity is more important than ever, especially with the increasing complexity of the corporate compliance landscape and the growing sophistication of data breaches and hacks. No M&A strategy is complete without considering cybersecurity.

ProCircular’s Cyber Due Diligence for M&A services assist both buy and sell-side firms in quantifying, addressing, and mitigating M&A cybersecurity risks.

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What Is Cybersecurity Due Diligence, and Why Is It Important in Mergers and Acquisitions?

When performing due diligence audits, a security team will use various methods to find and mitigate risks across your devices and networks. Cybersecurity due diligence is particularly important in M&As because you’ll need to verify that all parties have strong security protocols. If not, you could be putting yourself in a risky situation.

To get the full picture of a company’s risks and vulnerabilities, all parties in an M&A will need due diligence audits to confirm the presence of strong security protocols and systems. These M&A due diligence assessments should include reviews of all network systems and digital assets. Some potential security issues that an M&A cybersecurity assessment might look for include:

Inadequate security protocols and processes: A company with a poor approach to security will likely need a significant overhaul, which adds to the cost of acquiring or merging with them. Due diligence audits can assess the prevalence and costs of such changes.
Legal considerations: In many industries, cybersecurity issues can come with legal ramifications, so a thorough M&A cybersecurity assessment helps to evaluate the risk and provide guidance for filling the gaps after the M&A.
Overall IT strategies: Aligning strategies is a crucial part of M&As, and cybersecurity is no exception. Due diligence audits can look for areas where the roadmaps of the two companies differ.
Third-party risks: Some companies work with many third parties, which can pose risks. M&A cybersecurity assessments consider the risk of these partnerships, including how the company in the M&A handles third-party data access.

Many companies treat IT and cybersecurity risks as an afterthought, but completing due diligence in mergers and acquisitions can help you accurately estimate integration costs, understand risks, and maximize the deal’s value. A cyber due diligence M&A assessment gives buyers a clearer picture of a company’s cybersecurity risks and helps prevent the possibility of a cyber attack, data breach, or another incident.

ProCircular’s Cybersecurity Due Diligence Services for Mergers and Acquisitions

ProCircular’s cyber experts understand the vast variety of cybersecurity considerations for mergers and acquisitions. When we conduct M&A cyber due diligence, we perform a cyber resilience assessment against national standards and summarize the company’s relative strengths and weaknesses. We then provide an easy-to-understand assessment of risk, high-level ideas for fixes and improvements, and recommendations on whether to move forward with the deal from a cybersecurity perspective

We aim to be a trusted partner as you navigate the M&A process, helping you identify M&A cyber risks and avoid security issues. Our skilled team includes engineers with various certifications and ongoing education opportunities to help them stay abreast of emerging cybersecurity threats.

While we leverage sophisticated tools in our M&A cybersecurity assessments, we also use the human element. Those experienced engineers select the right tests, interpret the results, and present actionable strategies to inform your M&A decisions. With our M&A cybersecurity assessments, you can improve profitability and minimize the risk of your next business venture.

What Is Covered Under Information Security Due Diligence?

Some aspects included in cyber M&A due diligence include:

Whether the company has had cyber incidents in the past and how it handled them
Changes that may be necessary to prevent future issues
Remediation recommendations
Cost analysis
The potential impact of cybersecurity concerns on the deal.

While we analyze these aspects, we’ll look for some of the most common cybersecurity risks associated with M&As, like information security vulnerabilities and misaligned strategic roadmaps. Even if the other organization hasn’t had security problems before, these issues could indicate problems in the future. We’ll also consider industry-specific requirements, such as how the other business protects patient health information in health care or meets financial regulations in banking. We use specific tactics during due diligence audits to put you in the best position for making business decisions.

An M&A cybersecurity assessment can help you make decisions about a deal and support the transition if you go through with it. Understanding the cybersecurity environment of the other company can help both parties prepare for the M&A without putting sensitive data at risk. Since an assessment includes long-term considerations, it can also help you make decisions about the company’s IT strategy. For example, if the two companies have different plans, due diligence assessments can help them map out an effective plan.

What Do Businesses Get With M&A Cybersecurity Strategy and Due Diligence?

When you work with ProCircular for cybersecurity M&A consulting, you’ll get:

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A cybersecurity strategic roadmap report and an executive presentation outlining the highlights of findings and overall recommendations

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A quantified assessment of risk with high-level cost estimates and timeliness for remediation recommendations

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A concise statement summarizing ProCircular’s opinion, from a cybersecurity standpoint, on whether or not the acquisition should proceed

Cybersecurity Considerations for Mergers and Acquisitions

The following areas will be evaluated during ProCircular’s M&A cyber risk assessment process:

Cybersecurity Program Maturity Review
Governance, Risk Management and Compliance (GRC) Documentation Review
SWOT Analysis
Infrastructure Inventory & Analysis
Strategic Roadmap
External Vulnerability Exploitation
External & Internal Vulnerability Assessment
Dark Web Credential Scan
Application Analysis (Smoke Test)

Why Should Businesses Work With ProCircular On M&A Cybersecurity Concerns?

Our unique mix of compliance and technical teams provides a complete picture of risks within tight timelines and compressed schedules. We blend experienced engineers, sophisticated software, and up-to-the-minute intel on the latest threats for a comprehensive approach. The result is cyber due diligence for mergers and acquisitions that help you avoid security pitfalls and plan for a profitable and efficient business venture.

Reach out to the ProCircular team to learn more about our cyber due diligence M&A services and get a free quote today.