With any kind of major purchase — a new car, home, computer, etc. — consumers try to make the most informed decisions they can based on the information they have. The same goes for businesses … and cybersecurity info is starting to play a bigger role in corporate M&A.
For consumers, a product flaw means lost money and buyer’s remorse. As such, professional product review sites and consumer advocacy organizations put together checklists of criteria on which products are evaluated and communicate the findings to consumers. As markets and products change and evolve, the criteria also change (say, the quality of electronic components in cars).
The same is true, of course, for corporate mergers and acquisitions. When companies look to purchase another organization, many performance indicators and assessments factor into the decision. Some of these factors change as technology changes, and at present, cybersecurity is firmly making its way onto many checklists.
A recent survey by Forescout Technologies took the pulse of more than 2,700 organizational purchasers, across seven countries, on the issue of cybersecurity. The results made clear that cyber risk weighs heavily on a purchase decision. The highlights:
- 53% of respondents indicated that a cybersecurity incident put a merger or acquisition in jeopardy
- 65% admitted to buyer’s remorse due to cybersecurity concerns after the deal closed.
Any company exploring an M&A deal should take cybersecurity into account long before making their decision. Hiring a third-party consultant to assess cyber risk is critical for avoiding potential flaws that could have direct and long-term cost impacts.
On the other side of the purchase, companies considering selling out to another organization should make sure their cybersecurity operations are up to snuff. Meeting cyber defense regulatory standards likely will be a necessary step in completing the sale.
Lunarline is prepared to support organizations on both sides of M&A. Our audit professionals and penetration testers can help make sure the purchaser understands their risks and adjusts their offer accordingly. Our compliance consulting services and managed security programs can help bolster the defenses of companies seeking an acquirer.
For more information on Lunarline and the services we offer, contact us online today.