In an Advisor Perspectives guest article, Brian Edelman, FCI CEO & Cybersecurity Expert, details leading reasons for firms to execute a Security Assessment for best Merger and Acquisition (M&A) outcome.
There’s a lot at stake during M&A transaction. Security Assessment is critical for discovery of cybersecurity risk prior to contract; undisclosed or breach information can change the financial performance of a deal.
Are you buying a firm? Reduce Liabilities. Are you selling your firm? Increase Valuation.
Please read the Advisor Perspectives article for complete details.
Here are key takeaways for buyers and sellers of advisory practices:
- In the transition of power in a M&A, fully understand breach history within your target company, how breaches have been handled and what actions have been put in place, so it doesn’t happen again. Buyers, by default, take on the reputational risk of the seller in an acquisition.
- Disposition of IT and security needs to be clear upfront during M&A transitions with access granted to all controls.
- If you are an acquiring company, create a holding or acquired group where you keep records, files and logs separate from the parent company until full evaluations and security status are up to par.
- During M&A, buying companies shouldn’t try to fix security issues before acquiring. Since you are aware of the situation, let it determine valuation, then fix the issues if you move forward.
- Attestations used to be enough when regulations were introduced. Now, firms must be able to demonstrate compliance – in that spirit, explore logs, evidence and more in a security assessment before a deal happens. Furthermore, knowing how to speak to Regulators, the FBI and Insurers, or having a cyber expert represent you, is critical in breach situations.
Contact FCI for information about Security Risk Assessment for domains, networks, and endpoints with detailed reporting and remediation recommendations.
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