#CyberFLASH: Organization’s cyber security can have an effect on acquisition, says report

krawczyk01.jpg.size.xxlarge.letterboxThere are three common reasons cyber security has to be among the top priorities for the C-suite: To maintain confidence of partners, customers and investors. Loss of confidence by any of those groups could undermine corporate revenues.

A new report suggests there’s another reason: To keep up the value of the company for a possible merger or acquisition.

“Virtually all acquirers must implement a rigorous diligence process when considering M&A targets,” says the report by West Monroe Partners, a U.S.-based business and technology consulting firm. “The nature of cyber threats is also changing constantly, requiring a nimble approach to due diligence.”

How big an issue is it? According to a survey of 30 senior executives at corporate and private equity firms that frequently conduct M&A transactions 80 per cent said cybersecurity issues are highly important in doing due diligence on potential deals. The other 20 per cent who said they are somewhat important.

Just over three quarters said said the importance of cybersecurity in potential deals had increased significantly over the last 24 months.

These numbers reflect the rapid growth of risks related to cybercrime and the growing number of costly data breaches, says the report.

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