Business Management Review

Cyber Security Risks Associated with Mergers and Acquisitions

Business Management Review | Monday, October 30, 2023

In almost every network, numerous endpoints remain undetected. Some of these devices are unmanaged or unknown (e.g., IoT, operational technology, and rogue devices), but managed devices can also remain undetected if they have broken agents.

The number of corporate mergers and acquisitions will grow during this period of economic uncertainity. As fledgling companies struggle to obtain loans and investments at higher interest rates, more established companies will purchase them. As part of typical M&A activity, such as reviewing balance sheets, contracts, and intellectual property, cybersecurity risk is often overlooked. Visibility into the newly acquired company is challenging.

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It is inevitable that companies face cybersecurity risks when they acquire another company. Without visibility into cybersecurity risk, even if there is no breach, integration between the two companies may be delayed, negatively affecting productivity.

When a company is acquired, it is not willing to open up its networks until the deal is done. This is sometimes out of mistrust and sometimes out of fear of being exposed for a lack of best practices. By reading on, find out how to mitigate some of the most common cybersecurity risks during mergers and acquisitions.

In almost every network, numerous endpoints remain undetected. Some of these devices are unmanaged or unknown (e.g., IoT, operational technology, and rogue devices), but managed devices can also remain undetected if they have broken agents. Agents can stop working for many reasons, particularly during a merger or when the environment, servers, or endpoint configurations are changed, which can cause issues. If an agent breaks, it can result in a loss of visibility and control over the device, application, or network.

Conducting Cybersecurity Due Diligence

Conducting cybersecurity due diligence may be easier said than done when merging or acquiring a company. An organization can, however, take a few steps to identify any gaps or vulnerabilities it may have. To ensure cybersecurity, the acquiring organization should conduct a cybersecurity assessment and plan to perform these assessments regularly.

When conducting a comprehensive security assessment, thoroughly examining the IT infrastructure, applications, security controls, policies, and procedures is essential. Additionally, it is crucial to assess the security posture of any third-party vendors or partners with access to the network or data in addition to the security posture of the merged entity. Security assessments require device inventories to be created. The inventory lists all networked devices, including servers, workstations, printers, and other items.

Automate – Orchestrate – Integrate

Standardizing security solutions will make it easier to share intelligence and automate network access control and endpoint remediation. Providing centralized visibility and control across the merged network includes using a single security platform, such as a network monitoring solution. Automated security solutions simplify integration by automating device discovery, policy enforcement, and configuration management tasks. Security teams can also quickly identify and remediate potential threats using centralized visibility and control across the merged network. In addition to ensuring consistency across merged networks, orchestrating security solutions can reduce gaps and vulnerabilities. In addition to reducing cyber-attack risk, automation and orchestration of security solutions can improve a company's overall security posture during mergers and acquisitions and beyond.

In many cases, networks cannot be integrated because security solutions cannot share intelligence or automate enforcement. When news of a deal becomes public, attackers know merged networks create weak points.

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