New York – Acquirers are increasingly aware of the need for vigorous cybersecurity due diligence in M&A, yet often lack the proper personnel to conduct thorough analyses, according to a new study by West Monroe Partners and Mergermarket, Testing the Defenses: Cybersecurity due diligence in M&A. As the importance of big data and IT rises across sectors, cybersecurity has become a vital area to assess at deal targets.
West Monroe Partners, a North American business and technology consulting firm, commissioned Mergermarket to interview North America-based senior M&A practitioners to provide insight on the complexities and challenges of cybersecurity due diligence in the acquisition process.
Seventy-seven percent of respondents said the importance of cybersecurity issues at M&A targets had increased significantly over the last two years, due to the increase in corporate data breaches and the liabilities that can be incurred as a result. Vulnerable security systems can also indicate poor risk management at a company.
“In the last 18 to 24 months, we have really started to see the importance of cybersecurity resonate with our clients,” said Matt Sondag, Managing Director at West Monroe Partners. “When a data breach lands on the front page of CNN.com or The Wall Street Journal, companies start to pay closer attention to the issue.”
Key findings from the report include:
- 80 percent of respondents said that cybersecurity issues have become highly important in the M&A due diligence process
- 70 percent of respondents said compliance problems are one of the most common types of cybersecurity issues uncovered during due diligence, while 40 percent said a lack of comprehensive security architecture is also common
- More than one-third (40 percent) of acquirers said they had discovered a cybersecurity problem at an acquisition after a deal went through, indicating that standards for due diligence remain low
Mergermarket is a business development and market intelligence tool designed specifically for the M&A sector and provides proprietary intelligence and analysis on corporate strategy across the world. With around 200 M&A journalists talking directly to senior executives, deal-makers and other key players in over 60 locations globally, Mergermarket reports on the whole deal life cycle, from mapping out companies’ early-stage strategic intentions to tracking deals before they develop and providing real-time news on live events, thereby creating a large window of opportunity. Subscribers can also mine for trends, patterns and deal ideas using Mergermarket’s comprehensive deals database and regular data-driven editorial analysis and commentary.
Visit www.mergermarket.com to learn more.
West Monroe Partners
West Monroe is a progressive business and technology consulting firm that partners with dynamic organizations to re-imagine, build and operate their businesses at peak performance. Our team of more than 750 professionals is comprised of an uncommon blend of business consultants and deep technologists. This unique combination of expertise enables us to design, develop, implement and run strategic business and technology solutions that yield a dramatic commercial impact on our clients’ profitability and performance. For more information, please visit www.westmonroepartners.com.