How cyber security affects the acquisition process
It's been mentioned previously on this blog that many considerations go into a merger or acquisition deal. From meeting shareholder satisfaction needs to determining whether the deal is with the right company and conducting due diligence, there is a lot to account for before it can move ahead.
In today's digital world, companies have a great deal of data, and as such, the protection of this data and respective business networks is a step in the acquisition process that should not be overlooked on either side of the deal. Due diligence should include vetting a company's network to ensure that it is safe.
For the company making the purchase, it is advisable to check a company's network to ensure that it has not been compromised by a security breach. A survey by Freshfields Bruckhaus Deringer, an International law firm, found that there is complacency surrounding cyber due diligence despite its importance.
Yet it was also found that 90 percent of respondents believed a cyber breach would reduce the value of the deal. It was also found that the awareness of these risks was increasing. If trends follow the sentiment discovered by this survey, it could stand to change the deal process, according to the law firm.
Companies considering an acquisition deal might want to take steps to determine how secure the company network is, and do what is necessary to protect against potential threats. The implications of a cyber security breach could have a large impact on companies that deal with large quantities of data.
Although significant, this is just one of numerous considerations to account for during the due diligence process. An M&A advisor will serve as a trusted resource for everything you need to know about developing a successful acquisition strategy.