Do Your Diligence – Cyber Risk in Mergers & Acquisitions

by David Ritzert 10. November 2015 11:34

As M&A activity increases, so too does the need for cyber security assessments. Cyber breaches are often in the news headlines, however, many companies have been slow to adopt cyber security risk procedures as part of their due diligence process.

Companies that plan growth through M&A activity should assess the cyber risk associated with their acquisition targets. The value of the target, as well as the overall enterprise, could be significantly impacted by a cyber breach. In addition to the potential loss in market value, an acquiring company that comes under attack can experience a major disruption to their normal operations, including increased costs and management efforts being diverted to remediation and shoring up defenses, rather than the integration efforts necessary to achieve the anticipated synergies from the transaction.

When cyber security procedures are incorporated into the due diligence process, companies can proactively understand and mitigate the potential risks of acquiring a compromised entity. If your company is involved in M&A activity and you don’t incorporate cyber security procedures into the due diligence process, you could be putting your company and the contemplated transaction at risk.

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Categories: Assurance

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