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How to Weave Technology into Your M&A Deal

February 1, 2024
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Years ago, mergers and acquisitions were sealed with a handshake. Those involved in the deal met in person and technology was in its infancy.  

Times have changed. As technology becomes a bigger part of doing business, there are many more risks to be considered when a merger is in the works.  

Any business that is considering buying another company or being acquired likely uses technology in some way, so all businesses in the M&A space must include cyber concerns in due diligence. Most M&A deals do not include cyber at this stage or in the final deal. By using the following tips, you could end up in a healthier situation when the deal is done.    

Evaluate: The buyer should thoroughly evaluate the seller’s online presence and its vulnerabilities when it comes to being a victim of cybercrime. The outcome can have a significant impact on the value of the seller’s business and how the two are integrated after the deal closes.  

Pay attention to the data: Data analytics are becoming increasingly popular in all realms of business, including in M&A deals. Use data and artificial intelligence to uncover issues that might stay hidden under the naked eye or more traditional M&A due diligence procedures.  

Come to terms: The buyer can be exposed to cybersecurity problems if they agree to take on existing associated risk. Specify in the terms of the deal what risks the buyer will assume.   

Buyer and Seller Beware: Bad actors are always watching, so be careful how much you discuss publicly when an M&A deal is underway. Keep many details to yourself so cybercriminals don’t try to find a way to access the systems of the companies involved as they put their focus elsewhere.  

These steps will enable your business to conduct a more thorough exam of the company under consideration for acquisition. It’s also a way for the mindful seller to find a viable solution for their business and their legacy to continue.  

Transactional Risk Advisors can help you get on the right track. Contact me at jphillips@oswaldcompanies.com or 216-777-6100.