Mergers and acquisitions (M&As) are a critical part of doing business in our modern, hypercompetitive world. Of all the factors that go into the valuation of a deal, cybersecurity occupies a prime place of importance. Ignoring it is a recipe for disaster.
When an enterprise overtakes or acquires another one, it takes over that company’s assets and liabilities as well. The valuation of the deal accounts for these factors. Nowadays, taking over a business entails absorbing its digital operations too — which means potentially opening the parent organization to cybersecurity threats and the risks associated with acquired applications and information systems.
That’s why it’s so crucial for business and security leaders to perform due diligence when finalizing M&A deals. Failure to do so can jeopardize the deal’s anticipated value. On the other hand, early detection can go a long way toward resolving cybersecurity issues in time.
Is Cybersecurity on Your M&A Due Diligence Checklist?
Of all the risks associated with M&A deals, cybersecurity issues rank right at the top. Besides violating rules and regulations, cyberthreats erode the assets of the merged entity, thereby damaging its reputation and derailing its growth in the market.
An acquired entity always endeavors to maximize its returns in every way. At the same time, the acquirer’s network needs to ensure adequate valuation of the deal so that it becomes a sustainable asset. Investment in cybersecurity is, therefore, a critical factor.
Cybersecurity is crucial in all kinds of businesses; it is not limited to tech establishments alone. For example, a restaurant chain is as vulnerable as an e-commerce retail store because consumers use their credit cards for payment. A d ..
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