Considering a merger or acquisition? Remote Compromise Assessment can help evaluate your target’s cyber posture.
Mergers and acquisitions (M&As) can massively expand a business’s reach and income, but they could also put it in a precarious position if the target company is not on stable footing. Your business may inherit a threat that your target didn’t even know was present in its systems.
According to the Cost of a Data Breach Report 2020 by IBM Security, the average cost of a data breach is $3.86 million. This expense can be devastating for any business, but it may be even more impactful if you’ve just acquired or merged with another business.
That’s why due diligence is essential. The process entails investigating and verifying key details to gain a clearer understanding of a business’s position. Armed with more intelligence, decision-makers can make better-informed choices, thereby improving the odds of success. A Remote Compromise Assessment can make the difference between setting your new entity up for success and putting it at risk of disaster.
Why Conduct a Remote Compromise Assessment Before a Merger or Acquisition?
Check for Breaches
Even if a business appears to have robust defences, some attacks may have sneaked through undetected. Regardless of the target’s apparent comprehensiveness, a Remote Compromise Assessment should be conducted to verify that the systems are secure. Acquiring or merging with a business with a weak cybersecurity posture can jeopardize the infrastructure of the newly established entity.
Confirm the Value
A business’s network and data are essential elements of its overall value proposition. Without having a strong idea of your target’s cyber hygiene, you cannot accurately assess its worth. This is especially true in industries that rely heavily on private information of consumers and/or intellectual property. If accessed data has been acquired by cybercriminals, the target’s value may be significantly lower than it appears at first blush.
Ensure You Want To Go Through With the Deal
According to Forescout’s report “The Role of CyberSecurity in Mergers and Acquisitions Diligence,” 53% of respondents said that a critical cybersecurity issue or incident has put an M&A deal in jeopardy. An undisclosed data breach or other major problems may motivate the acquirer to halt negotiations.
Protect your Intellectual Property
Previous theft of Intellectual Property is a growing concern for many organisations engaging in a merger or acquisition. According to this ZDNet article, the FBI is investigating more than 1000 cases of Chinese theft of Intellectual Property. Even though companies claim they have patents granted for their IP, the problem goes back further than this. In a lot of cases, adversaries have gained access to the company’s network and stolen their research, design plans etc. before the patent was granted.
In 2016, Marriott purchased Starwood. Two years later, it was discovered that Starwood’s network had been compromised in 2014, two years before the acquisition. Threat actors had access to hundreds of millions of customer records, including credit card numbers, for approximately four years. This incident cost Marriott $28 million, though cyber insurance mitigated the damage to the company.
In 2016, Verizon was in negotiations to purchase Yahoo’s operating business. Yahoo falsely underestimated the number of breaches that impacted users’ personal information. It was later revealed that entire databases may have been stolen by nation-state hackers, potentially affecting 500 million users. Ultimately, Yahoo lost $1.3 billion in market capitalization, reduced its purchase price by $350 million, and agreed to share breach-related expenses and liabilities.
Before you get too far into the M&A process, consider conducting a comprehensive compromise assessment of the target. At GuardYoo, fast and affordable Remote Compromise Assessments are our speciality. Don’t let a breach derail your deal and put your business at risk. Contact GuardYoo via email or our chat feature to learn more about this quick, easy solution.