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.
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.
Throughout a merger and acquisition process, cybersecurity threats can impact both:
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.
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:
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.
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.
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.
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.
The paper cost of cybersecurity can vary depending on the:
Safeguarding your data throughout the entire merging process is key to moving into the post-merger phase with limited disruption to your organization.
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.
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.
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.
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 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 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.
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.
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.
