M&A Security: Ensuring Seamless and Secure Integration with a Corporate VPN During Mergers and Acquisitions

Acquisitions and mergers can be complicated experiences for businesses and business owners. Combining two workforces, networks, support, and so many other things takes a lot of time and work.

In this blog post, we will discuss some of the challenges faced by businesses post-merger, and share ways that you can protect your business and your business network following a merger.

The Importance of M&A Cybersecurity

One of the most important aspects of a merger and acquisition is cybersecurity.

Security breaches during the M&A process can expose your data to cyber criminals and create significant issues for your new organization. Large breaches can be impactful enough to prevent the M&A from proceeding.

Identifying potential cybersecurity risks isn’t just the responsibility of the target company, but of both organizations to minimize cyber threats. Be sure to establish security policies so your cybersecurity teams are on the same page during your M&A.

Cyber Risks in the M&A Process

Throughout a merger and acquisition process, cybersecurity threats can impact both:

  • The target company
  • The acquiring company

Having cybersecurity teams working together during the due diligence process can help avoid security issues, protect intellectual property, and improve the integration process.

If you aren’t aware of potential security risks, or if your security teams are not communicating potential security concerns between the target organization and acquiring organization, the transition process can be severely impacted, 

In some cases, it can even impact business’s continuity and business operations.

Dormant Threats

During the integration process between a target company and acquiring company, dormant threats loom as a potential risk. Taking security measures with proper security screenings is an important step during the transition phase for the acquiring organization.

Failure to detect dormant threats in the system can:

  • Hurt your intellectual property
  • Expose you to future security breaches
  • Impact business operations

With a large increase in internet connectivity for organizations with IoT leading to additional devices connecting to the internet, the attack surface is increased and can complicate acquisition transactions if cyber incidents are not handled correctly.

Disruption to Technology

As the systems integrate during an M&A, your digital assets are at risk. It is among the most common issues in mergers, and having proper security posture is a key step in the decision-making process to help avoid potential technology disruptions.

Integrating the systems will change the reporting structures, impact access controls, and may even require further post-merger integration, following the acquisition.

Minimizing downtime can help alleviate these potential cyber risks and prevent critical assets from becoming at risk. It also helps both the parent business and core business stay functional, and avoid any downtime to employee productivity due to network and system upgrades. 

Data Security

During an M&A, both sets of data for the target and acquiring company are at risk. Further due diligence must be done by the acquiring company to ensure that any cybersecurity concerns are taken care of during the acquisitions process.

Even the most attractive target could be at risk if data security is not taken seriously during the entire M&A process.

Lack of Transparency

Communication between the two organizations is key. Issues may arise with disgruntled employees on either side of the company, but as the two organizations merge, transparency is key to ensure that the business strategies can continue uninterrupted following the acquisition.

Having both teams aware of the other’s cybersecurity practices and cybersecurity posture can prevent future issues down the road.

How Much Does Security Risk Cost?

The paper cost of cybersecurity can vary depending on the:

  • Size of your company
  • How involved the cybersecurity company will be
  • How long the process can take

Safeguarding your data throughout the entire merging process is key to moving into the post-merger phase with limited disruption to your organization.

Security Assessments as Part of Your Acquisition Due Diligence

Assessing the security of your organization is a key step in due diligence for both parties during an M&A. The roles will be different depending on if you are being acquired, or if you’re acquiring the other organization. 

Typically, these responsibilities will be laid out as part of your contractual obligations.

  • If you’re the organization that is being acquired, maintaining a good track record of strong cyber security, and keeping compliance is an important step to take. This track record will show a commitment to protecting data and can help establish trust with the organization that you are merging with.
  • If your organization is acquiring another, an important step is to lay out what is expected for cybersecurity in the deal terms. Having the expectation clearly outlined in paper can help avoid any confusion, and stress the expectations for both organizations moving forward.

What steps should you take if a security breach occurs during M&A?

In the event of a security breach during a merger and acquisition (M&A) process, it’s crucial to act promptly to minimize potential damage and protect sensitive information.

  1. Isolate the affected systems and networks to prevent the breach from spreading further. This may involve taking affected systems offline or implementing temporary security measures.
  2. Conduct a thorough assessment to understand the scope and impact of the breach. Identify the compromised data, systems, and potential vulnerabilities that led to the breach.
  3. Notify relevant parties, including internal stakeholders, regulatory authorities, and affected individuals. Compliance with data breach notification laws is essential. The timing and manner of notification may vary depending on jurisdiction.
  4. Develop a clear communication plan to keep all stakeholders informed. This includes employees, customers, partners, and the media. Transparent communication can help maintain trust and mitigate reputational damage.
  5. Implement continuous monitoring of systems and networks to detect any signs of suspicious activity. This proactive approach can help identify and address potential security threats promptly.

Remember, each security breach is unique, and the response may need to be tailored to the specific circumstances of the incident. Engaging with cybersecurity experts and legal professionals is crucial to navigate the complexities of a security breach during M&A.

How do you determine the budget for cybersecurity and reduce the risk of a breach during M&A?

Determining a cybersecurity budget during an M&A requires a strategic and comprehensive approach. Start with conducting a thorough risk assessment that evaluates the cybersecurity risks associated with the integration of both organizations. Consider factors such as existing vulnerabilities, regulatory compliance requirements, and the complexity of IT system integration. 

Investing in Technology Solutions

Investing in technology solutions is crucial to reducing the risk of a breach during M&A. Identify and allocate budget for cybersecurity tools such as advanced threat detection, endpoint protection, and encryption solutions. Ensure that these technologies are seamlessly integrated into the consolidated IT infrastructure.

Employee Training & Awareness

Employee training and awareness programs are equally vital – allocate resources for cybersecurity training initiatives to educate staff on security protocols, raise awareness about potential threats, and conduct phishing simulations. 

Continuous Monitoring

Prioritize continuous monitoring, auditing, and regular cybersecurity drills to ensure ongoing compliance and preparedness. By following these steps, organizations can establish a well-rounded cybersecurity budget and effectively mitigate the risk of breaches during M&A.

Supercharge Cybersecurity with Perimeter 81

Are you preparing to go through the M&A process and need a cybersecurity partner to help minimize your risk? Perimeter81 is here to help. As experts in the M&A process, we can help guide your organization to help ensure your data is protected before, during, and after your M&A.

Reach out to Perimeter81 today to schedule a FREE consultation now.


Why do most M&A fail?
While intentions to complete an M&A are initially high from both parties, there are times where they do not work. Typically, the reason that most M&A fail is due to value destruction, poor communication and integration, and cultural differences between the two organizations.

Understanding these points during the due diligence process can greatly impact the chances of your M&A going smoothly.
Why do up to 90% of mergers and acquisitions fail?
The biggest reason most M&A fail are because of overpaying and overvaluation. Acquiring companies are drawn by the potential of a target company, but if the target does not live up to the potential vision, it leaves the acquiring company at risk.
What is the success rate of M&A?
M&A is very risky. About 70% to 90% of mergers and acquisitions fail.