No doubt that cyber security is a key risk in business, but more specifically in mergers and acquisitions. Certainly, logic says that the larger and more diverse the entity, the more complicated the information technology environment will be, but so too will be the resources to adequately handle due diligence scrutiny. For small and medium sized businesses, cyber security risks in M&A are real, harder to handle, and potentially deadly to the deal. Working primarily with CEOs of smaller technology companies as I do, preparing for and dealing with cyber security issues in due diligence is as important as verifying executive backgrounds or accounts receivable. It is one of the key areas that can have numerous, hidden risks that can truly blow up your deal if found too late. Bottom line is that “an ounce of prevention is a pound of cure” in both daily operations and exit due diligence.
So with that in mind, I draw your attention to a very well written piece from the law firm of Freshfields Bruckhaus Deringer LLP entitled “Cyber Security in M&A”. It is about 15 pages that summarize the results of a survey they conducted on this area as well as some solid advice from the contributing partners. It is good reading and downloadable too.
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