Cybersecurity News: New Survey Reveals Cybersecurity Risks Are Impacting M&A Deals

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  • New survey data reveals cybersecurity risks are impacting the anticipated value of M&A deals
  • Cyber threats are higher even after deals are closed, massively influencing the company’s reputation
  • Cybersecurity assessments and comprehensive security audits before and during the M&A deals are essential

    Mergers and Acquisitions (M&As) usually means you are also taking the digital operations of the company. While the acquirer is anticipating for higher profits with extended operations, these deals can pose a potential cybersecurity risk to your company unless the acquirer identifies and reinforces threat mitigation measures early in the process. 

Survey Reveals Cybersecurity Risks are Jeopardizing M&A Deals 

study conducted by Forescout Technologies Inc. on 2700+ business and information technology decision makers in seven countries found that about 53% of respondents encountered a critical cybersecurity issue which put their M&A deal to risk.

Moreover, 65% of the respondents claimed that once the deals were closed, their company experienced anguish from buyers, who were concerned about cybersecurity issues.

Cybersecurity News on How Cyberattacks Threatened Acquisitions 

Recently, many reports surfaced in media which highlighted how acquisitions resulted in cybersecurity complexities.

In May 2018, when Spirit AeroSystems Holdings Inc. was in the process to buy ASCO Industries, the company was hit by a large-scale ransomware attack. For ASCO, it was a “serious” disruption, and its sites in Belgium, Canada, Germany and the U.S. came to a halt.

In another example, in 2017, when Yahoo suffered from security breaches, Verizon Communications Inc. acquired Yahoo’s Internet properties at a $350 million discount.

Also, when Marriott International Inc. bought Starwood, a breach was disclosed some days after the deal and stories appeared on how Marriott is inheriting a massive security risk.


Are Cybersecurity Risks being Neglected?

The problem lies in the hypothesizing cybersecurity as an “intangible risk.”

We need to understand that cybersecurity attacks are more than mere violation of law and regulations. These attacks pose a very substantial risk to the operations and businesses can lose “true money” as a result.

When a business is acquired, the acquirer makes sure that the target adds as a sustainable asset. However, inadequate assessment and evaluation of cybersecurity can:

•    Reduce the monetary worth of the target’s assets

•    Seriously harm company’s Brand Image

•    Negatively Impact the growth prospects

Think about acquiring a company that has existing cyber vulnerabilities. Threat actors will try to attain access to your business when you are in the integration stage.

Therefore, it is increasingly crucial to monitor the cybersecurity risks, especially between the period of – announcement of the deal and its closing. In fact, during this time, your stakeholders, including investors, shareholders, employees are already anxious, and any cybersecurity threat can further the business disruption.

As you progress with M&A plans, you’ll recognize how you need to stress on cybersecurity evaluations before and during the acquisitions vehemently.


How Managed Security Solutions can help?

Most businesses, no matter, small, medium or large, consider that cybersecurity partner is vital to their business success.

When you hire a Managed Service Providers (MSPs), the first thing they might do is to conduct a thorough cybersecurity risk assessment, auditing your industry-specific threats and anticipating your business’s shifting demands.

Managed security services are increasingly being relied upon as threat prevention support, educating, protecting and mitigating potential cyber-attacks. Also, MSPs have been high in providing early warnings to the businesses and safeguarding their interest.

Here is how managed security solutions can help acquirer during the M&A deals:

  • Conducting audit assessment and preparing incident response of a deal target with insights to the threats, costs, negotiations and growth planning.
  • Breaking down the target’s cybersecurity program, compatibility and resilience of its IT operations
  • Measuring causes to target’s previous cyber incidents – assessing vulnerable applications
  • Classifying sensitive and valuable data and how it should be protected
  • Assessing how target complies with government regulations and privacy requirements
  • Weighing Industry-specific threats and preparing comprehensive threat mitigation plans
  • Determining how the acquisition will impact acquirer’s brand and reputation in the long run

Once your MSP focuses on these areas during the deal, this will help minimize the chances of business disruption in the short or long term.

Collaborate with Discovernet

At Discovernet, we provide comprehensive security measures, helping you with complete risk assessments, determining how threat actors can undermine the organization’s cybersecurity during M&A deals. 

Moreover, we can help you address the underlying cybersecurity issues – assessing the history of cyber events, the controls in place to restrict cyberattacks, the assets which could be in risk & much more. Our synergies revolve around determining how acquirer and target’s IT systems and protocols will work coherently. 

If you are planning for M&A deals, we can help you with smooth proceedings, limiting surprises and ensuring everything goes well with digital platforms.

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