M&A Cybersecurity Due Diligence

Why Cybersecurity Due Diligence Matters

When you're evaluating an acquisition, cybersecurity assessment has become as important as financial and legal due diligence. Research consistently shows that 80% of acquisition targets have cybersecurity issues that can impact deal value, integration complexity, or post-acquisition operations.

The key insight is that cybersecurity problems discovered after closing become your problems. By conducting thorough cybersecurity due diligence, you gain visibility into these issues when you can still factor them into your investment decision.

What We Typically Discover

Compliance Gaps: Many companies believe they're compliant with industry regulations like HIPAA, PCI-DSS, or SOX, but closer examination often reveals gaps that could trigger penalties or require immediate post-acquisition investment.

Technical Vulnerabilities: Legacy systems, unpatched software, and configuration weaknesses create security risks and introduce integration challenges during post-acquisition system consolidation.

Incident History: Previous security incidents that may not have been fully disclosed, including their resolution status and potential ongoing implications for operations or regulatory compliance.

Vendor Risk Exposure: Third-party relationships that introduce cybersecurity risks, particularly when the target lacks proper vendor oversight or contractual protections.

Our Assessment Process

Phase 1: Information Gathering (Days 1-3): We review documentation about the target's cybersecurity posture, including policies, procedures, audit reports, and any previous security assessments.

Phase 2: Technical Evaluation (Days 4-8): We examine network architecture, access controls, data protection measures, and security monitoring capabilities to understand the actual security implementation.

Phase 3: Compliance Review (Days 6-10): We evaluate compliance with relevant regulations and standards, reviewing audit history and identifying gaps that could impact post-acquisition operations.

Phase 4: Risk Analysis & Reporting (Days 11-15): We synthesize findings into actionable recommendations with risk prioritization, remediation cost estimates, and integration planning guidance.

What You Receive

Executive Summary: A business-focused summary with investment recommendations, highlighting deal breakers and their potential impact on valuation.

Detailed Technical Report: Comprehensive documentation covering vulnerabilities, compliance gaps, and remediation recommendations.

Integration Planning Guide: Practical guidance for post-acquisition cybersecurity integration, including timeline recommendations and resource needs.

Cost Estimates: Realistic remediation cost projections to factor into your investment analysis.

Industry Expertise

Healthcare Technology: Deep understanding of HIPAA requirements, healthcare workflows, and the unique challenges of protecting patient data across distributed systems.

Financial Services: Extensive experience with SEC, FINRA, and banking regulations plus practical knowledge of trading system security and financial data protection.

Software-as-a-Service (SaaS): Specialized expertise in multi-tenant architecture security, cloud compliance, and serving enterprise customers.

Manufacturing & Industrial: Understanding of operational technology security, supply chain risks, and the cybersecurity implications of connected manufacturing systems.