Merger Acquisition Divestiture Support

Cybersecurity support for merger and acquisition (M&A) activities is crucial to ensure that the integration of two organizations doesn’t introduce new cybersecurity risks or vulnerabilities, respects data protection agreements and addresses vendor supply chain risks. Early analysis of cyber risks present an opportunity to shape the structure or valuation of the deal to align with the actual risk profile. In highly regulated industries, it is common for cybersecurity assessment to be mandated by the regulators. Upfont planning reduces impacts to the M&A timelines while also addressing risk management expectations.

Services

Due Diligence Assessment: Conducting a comprehensive cybersecurity due diligence assessment is essential before completing an M&A transaction. This involves evaluating the cybersecurity posture of the target company to identify any existing security vulnerabilities, weaknesses, or compliance issues. The assessment may include reviewing policies, procedures, technical controls, incident response plans, and compliance with relevant regulations.
Risk Assessment and Mitigation: Assessing the cybersecurity risks associated with the merger or acquisition helps prioritize areas for mitigation. This includes identifying potential threats, such as data breaches, intellectual property theft, or supply chain risks, and developing strategies to mitigate these risks effectively. The goal is to ensure that the combined entity can maintain a secure and resilient infrastructure post-transaction.
Integration Planning: Developing a detailed integration plan for cybersecurity is essential to ensure a smooth transition and minimize disruptions to business operations. This includes aligning cybersecurity policies, procedures, and technical controls between the acquiring and target companies. Integration planning also involves coordinating efforts between IT, security, legal, and compliance teams to address any gaps and ensure compliance with regulatory requirements.
Data Protection and Privacy Compliance: Ensuring compliance with data protection and privacy regulations, such as GDPR or CCPA, is critical during M&A activities, especially when dealing with sensitive customer or employee data. Cybersecurity support involves assessing data handling practices, implementing appropriate controls for data protection, and addressing any compliance gaps to mitigate legal and regulatory risks.
Incident Response Planning: Developing a unified incident response plan that encompasses both organizations is essential to effectively respond to cybersecurity incidents post-transaction. This includes defining roles and responsibilities, establishing communication protocols, and conducting joint training exercises to ensure a coordinated response to security incidents.
Vendor and Third-Party Risk Management: Assessing the cybersecurity posture of vendors and third-party service providers involved in the M&A process is crucial to mitigate supply chain risks. This includes evaluating the security practices of vendors, conducting security assessments, and ensuring contractual agreements include appropriate cybersecurity requirements and protections.
Employee Training and Awareness: Providing cybersecurity training and awareness programs for employees of both organizations helps foster a security-conscious culture and reduce the risk of human error leading to security incidents. Training should cover topics such as phishing awareness, password security, and best practices for protecting sensitive information.

Divestitures

When divesting of assets, many of the same considerations apply, but often at a different scale and priority. More attention is paid to protecting information assets of the seller from unauthorized exposure or unexpected impacts. If divesting to a private equity — or other entity without existing operational capabilities — the setup of the NewCo is often responsibility of the seller. Your staff are used to mature, enterprise systems which NewCo cannot afford, and do not require.

With years of experience, we bring a practical perspective that manages risks, supports speed of transaction and protects all participants in the deal. This practicality extends to the eventual operational handoff to ensure the long-term operator of the assets is prepared.