3 Major Advantages of Cybersecurity M&A Due Diligence

Mergers & Acquisitions include acquiring an asset and taking upon the acquired asset’s data privacy and cybersecurity risks. The past, present, and future cybersecurity and data risks can affect the final terms of the M&A agreement. Moreover, if cybersecurity risks are identified to cause serious issues, the M&A transaction can completely fall through.

Hence, if your company is acquiring another company, it is important to get cyber security M&A due diligence before making a final offer. Here’s how cybersecurity due diligence during M&A can benefit you from start to finish of the transaction.

Get Negotiation Leverage

With a cybersecurity due diligence plan in place, you can identify the risks before the final acquisition. Knowing the risks helps you negotiate a more profitable valuation during acquisition. Moreover, you can identify the target company’s overall maturity and cyber resilience with an effective cybersecurity due diligence plan.

This can drastically turn the final terms of the acquisition agreement in your favor. You can ensure that you aren’t overpaying the target company. Additionally, you can ensure a smooth transition and amalgamation of buyer and target company’s current and future security features, procedures, and frameworks.

Prevent Financial and Reputational Damage

A cybersecurity due diligence plan can help you identify and mitigate cybersecurity risks before acquiring the target company. Understanding the risks ensures you can tackle them early on, thus preventing financial and reputational damage to your company after acquisition.

One of the prominent examples of how cybersecurity due diligence can make a difference is Avast’s acquisition of Piriform’s CCleaner. Since Avast failed to conduct cyber security mergers and acquisitions due diligence before the acquisition, they weren’t aware of how deeply hackers had infected CCleaner’s data. Avast was liable for the financial, reputational, and data damage caused by this negligence, which affected its reputation in the market.

Legal Compliance

A cybersecurity due diligence plan can help you maintain legal compliance with current security and data protection regulations. You can avoid hefty penalties and legal issues in the future.

About Defensible Technology:

If you are in the process of M&A, make sure to get cybersecurity due diligence services from Defensible Technology. Being a security-first and risk-based IT solutions provider, this company can assist you in identifying potential risks in the target company. With advanced services such as vulnerability management cybersecurity, you ensure successful and profitable M&A agreements.

To learn more about cybersecurity due diligence, visit https://www.defensible.tech/

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