Conducting due diligence on a potential target is a critical part of any M&A transaction. The process of due diligence helps to ensure that the buyer understands the risks and opportunities associated with the deal, and it provides a chance to renegotiate terms or walk away from the deal if necessary. When it comes to cybersecurity, due diligence is particularly important. With data breaches becoming more common and more costly, buyers need to be sure that they are buying a target that has robust cybersecurity measures in place. There are a number of ways to conduct due diligence on a target's cybersecurity posture, but some of the most important include reviewing the target's incident response plan, assessing the target's compliance with industry-standard security frameworks, and conducting penetration testing. By taking the time to conduct proper cybersecurity due diligence, buyers can help to protect themselves from costly data breaches down the road.
How this will improve you cybersecurity posture
This is especially true in the case of cybersecurity M&A, where a company's value may hinge on its ability to protect sensitive data. For example, if one company is looking to acquire another that has a history of data breaches, the due diligence process should include a close examination of the target company's cybersecurity practices. By taking the time to assess the value and benefits of a potential merger or acquisition, companies can help ensure that they are making a sound investment.