All-Cash or All-Risk?
You've found the perfect company. The market synergy is undeniable, the financials are solid, and the acquisition promises to accelerate your growth. You’re ready to close the deal.
But have you looked under the hood?
In the fast-paced world of mergers and acquisitions, cybersecurity due diligence is often treated like an afterthought—a speed bump on the road to a handshake. In a recent episode of Simplifying Cyber, we discussed how this mindset is a direct line to a post-acquisition nightmare.
Don't let a "home inspection" for your new company get skipped. The real value isn't just in the financials; it's in what's lurking in the code, the network, and the contracts.
Skipping the Crown Jewels
When you acquire a company, you're buying the "crown jewels"—the specific intellectual property, customer data, or technology that makes the company valuable. An effective cyber due diligence strategy recognizes and prioritizes the crown jewels. It asks the critical questions:
- Is the product you're buying secure?
- Has the customer data you're acquiring been compromised?
- Are there existing vulnerabilities that you should be aware of?
Overlooking these fundamentals is common and can have devastating consequences. It's how a promising acquisition becomes a liability, and how a strategic advantage turns into a very public embarrassment.
Don't step over a dollar to pick up a nickel.
The Fastest Way to Slow Down a Deal? Bad Questions.
Business leaders are right to be wary of anything that might slow down a deal. The longer an M&A transaction drags on, the more expensive it gets, and the higher the risk of talent and revenue attrition. Balancing the need for speed with thorough due diligence is an act best mastered through practice, and fortunately, our team has decades of experience from both corporate and consulting roles.
In fact, we've built a playbook for this exact challenge. Here’s a sneak peek of our approach:
- Ask the right questions, quickly.
- Focus on the things that matter for day-one operational concerns and deal valuation.
- Turn risks into actionable plans.
- Don't just find problems; we help you create a post-close roadmap with clear timelines.
- Prioritize effectively.
- Decide what needs to be fixed immediately (the water) versus what can wait (the air conditioners).
Making the Post-Deal "Divorce" Uncomfortable
Another M&A myth... busted! The work doesn't stop when the deal closes.
In fact, that's when the real challenge of integration begins. A crucial, yet often overlooked, part of this process is the Transition Service Agreement (TSA).
As my colleague Todd Wilkinson put it, "Those TSAs should be uncomfortable and they should feel like divorce paperwork." The goal is to motivate swift integration by making the temporary state deliberately difficult. A well-structured TSA pushes both sides to merge their systems, processes, and teams faster, saving you from a prolonged and costly integration period.
Your Security is a Deal-Maker, Not a Deal-Breaker
Ultimately, a proactive and strategic approach to cyber due diligence is an enabler, not an impediment. By bringing in the right expertise early on, you gain the clarity to negotiate from a position of strength, protect your investment, and ensure a smoother integration.
Don't let your next M&A deal be a roll of the dice. Take control of your risk management and turn your cybersecurity from a potential liability into a strategic advantage.
Ready to connect with experts who have been there before? Reach out via info@revealrisk.com to book a meeting.
Cody Rivers
