Cybersecurity in Mergers and Acquisitions

Buying or merging with another business is both an exciting and stressful time. In the midst of the flurry of activity surrounding a merger process, cybersecurity measures can easily be overlooked in the planning stages. Given that the security of both businesses during mergers and acquisitions could be at risk if these are neglected, it’s clear that data security must be a priority throughout the consolidation process to ensure a smooth transition.

 

Why Cybersecurity Matters

Ideally, both companies in mergers and acquisition situations already have cybersecurity solutions implemented. However, even if that’s true, each business is different, and each company is very likely to have different types of solutions and processes in place that may not complement the others.

Hackers also know this is a vulnerable time for companies when their guards might be down. They’re eager to exploit any weaknesses that may arise.

Another problem is you don’t know how diligent the company you’re merging with or acquiring has been in terms of cybersecurity. A flaw in their security could put your entire company at risk of a costly breach. Data security management services provided by a trusted managed service provider can help uncover any existing risks before any damage can be done.

 

Top Cybersecurity Risks

Cybersecurity in mergers and acquisitions is critical to avoid opening networks up to hackers and exposing sensitive data. Plus, any risks could devalue the purchase, costing you more than just any breaches themselves.

Before any merger or acquisition, consider the following cybersecurity risks:

• Outdated or poor cybersecurity policies and processes
• Outdated systems, hardware, and software
• Unpatched vulnerabilities
• No record of recent penetration testing
• Lack of recent data backups
• No data or disaster recovery plan
• Little to no encryption for sensitive data
• No remote device management security
• Unsecured data transfer between companies
• Poor password management
• Lack of regulatory compliance
• Poor data access control

All of these risks represent potential entry points for hackers. Of course, without proper data backup and transfer controls in place, there’s also the risk for data loss even without hacker intervention. In addition, if access to data isn’t controlled, disgruntled employees could easily access and sell sensitive data, harming both businesses in the process.

Providers of IT support services can help you ensure a secure consolidation process by performing a comprehensive risk assessment to determine what risks exist for both companies. Based on what they discover, a plan can then be put in place to fully secure everything before the merger or acquisition takes place.

 

Cost of Cybersecurity Risks

In addition to the risks themselves, there’s also the underlying costs associated with those risks. When you acquire another business and merge together, you’re taking on their security baggage. Any vulnerabilities they have become your vulnerabilities as well.

With every risk that’s not addressed before the merger, your costs increase.

What kinds of costs?

• First, think about what the costs would be if the data itself were to be breached.
• You also run the risk of costly fines that suddenly become your responsibility if you’ve acquired the breached company. If the business you’re acquiring has not already had been practicing well-defined cybersecurity strategies prior to the acquisition, they may have a breach that’s gone unnoticed for months or years.
• You could also be subject to lawsuits file by clients whose data has been breached.
• Finally, there’s the cost to your company’s reputation. The last thing you want is to merge with or acquire a new business only to suddenly be the victim of a major breach or attack. This can ruin your reputation and cause you to lose business.

 

Partnering With a Managed IT Services Provider

The best managed IT services providers offer a full range of data security management solutions. Not only do they customize solutions to your needs, but they also take a proactive approach to cybersecurity management. This includes evaluating current security practices, auditing for vulnerabilities, and putting solutions into place to protect data. Plus, they help you in create incident response plans should something ever go wrong.

 

At GSDSolutions, you get expert guidance to help prepare both companies during mergers and acquisitions. Consolidating two companies is already a complex process without also having to worry about cybersecurity; however, we work alongside you to mitigate risks and keep your data safer throughout the process and into the future.

Give our team at GSDSolutions IT Services a call at (650) 282-7695, or drop us an email at getstuffdone@gsdsolutions.io to learn more about our services and how we can help you ensure that you put a secure merger process in place for your business.