Mergers and acquisitions (M&A) represent exciting growth opportunities for businesses, allowing them to expand their market share, acquire new technologies, acquire customer bases, and enhance operational efficiencies. However, amid the financial and strategic considerations, cybersecurity risks often remain overlooked. The reality is that businesses undergoing M&A (especially the organizations being acquired) are highly susceptible to cyberattacks, making cybersecurity diligence a critical component of any transaction.
When two companies merge, their IT environments, databases, and networks integrate, creating a larger and more complex attack surface. Cybercriminals may exploit vulnerabilities that emerge during this transition. If a company being acquired has pre-existing cybersecurity weaknesses, those vulnerabilities become the responsibility of the acquiring company. Plus, vulnerabilities can traverse between companies and if not identified and addressed prior to integration, this makes the attacks much easier for cybercriminals. Attackers may have already infiltrated the target company’s network, waiting for an opportune moment to strike.
Additionally, the fast-paced nature of the M&A process can lead to overlooked security controls, policies and misconfigurations, creating an ideal window for cybercriminals to exploit system weaknesses. Employees, inundated with new information and communications, may also become more susceptible to phishing attacks disguised as legitimate correspondence from leadership, IT teams, or legal departments. Businesses must also ensure compliance with data protection regulations such as GDPR, CCPA, or HIPAA, as failure to do so can result in legal penalties and reputational damage.
To stay protected, businesses must conduct thorough cyber due diligence before finalizing a deal. Evaluating the security posture of the target company, identifying past breaches, determining if vulnerabilities could traverse and reviewing security policies should be a priority. Once an agreement is in place, a structured cybersecurity integration plan can help mitigate risks, ensuring that digital assets and applications from both companies are carefully inventoried and standardized security protocols are put in place.
Continuous threat monitoring is another essential measure. Security teams should deploy real-time threat detection tools and conduct penetration testing to identify weak points before they become liabilities. Employees should also receive cyber awareness training to help them recognize suspicious emails, securely manage credentials, and report potential security incidents promptly. They need to be aware of the heightened security risks and be on guard during the acquisition and integration process.
Access control is another critical aspect of cybersecurity during M&A. Companies should limit access to sensitive systems until security verification is complete and implement multi-factor authentication for all critical applications. Periodic access audits help ensure that only authorized personnel have the appropriate permissions.
Even with the best preventive measures in place, cyber incidents may still occur. A well-prepared incident response plan ensures swift action in the event of a breach. Businesses should define roles and responsibilities, establish communication protocols with internal and external stakeholders, and simulate breach scenarios to test response effectiveness. Bringing in external cybersecurity consultants can also strengthen an organization’s defenses.
Cybersecurity must be a top priority during mergers and acquisitions to protect valuable data, maintain regulatory compliance, and prevent financial losses. Businesses that neglect cybersecurity due diligence risk inheriting undetected threats that could lead to devastating breaches. By implementing proactive security measures, educating employees, and continuously monitoring for threats, companies can navigate M&A transactions securely and ensure long-term success. In the digital age, cybersecurity isn’t just an IT concern—it’s a fundamental business necessity. Prioritizing cybersecurity during M&A will not only safeguard assets but also strengthen the foundation of a newly integrated organization.
For personalized and advanced data protection strategies tailored to your M&A plans and organization’s unique needs, feel free to reach out to Guard Street, a leader in cybersecurity solutions.
Located in Wheaton, IL, Guard Street is a premier cybersecurity firm offering a spectrum of protection services including advisory and compliance, penetration testing, vulnerability management and emergency response services. We specialize in empowering clients to mitigate cyber risks and provide unparalleled solutions to aid organizations in recovering from cyber-attacks swiftly.