Cybersecurity Risks Are Threatening Deals, Industry Survey Shows

Cybersecurity Risks Are Threatening Deals, Industry Survey Shows
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Cybersecurity issues are increasingly becoming a concern in mergers and acquisitions, a new survey shows, according to Bloomberg. Lapses can jeopardize deals or haunt purchasers long after the deal is done.

Of more than 2,700 information technology and business decision makers surveyed by Forescout Technologies in seven countries, 53% reported that their organization had encountered a critical cybersecurity issue or incident that put an M&A deal in jeopardy. And 65% of respondents said they had experienced buyers’ remorse because of cybersecurity concerns after closing a deal.

The findings show that taking the time to conduct cybersecurity evaluations is important before and during an acquisition, even if it means finalizing the deal gets delayed, said Julie Cullivan, chief technology and people officer at Forescout. The company sells a security platform that allows companies to monitor and control access to their networks. “Cybersecurity is a challenge for every organization, and risk factors are changing all the time,“ Cullivan said. “It’s about making sure you put as much energy into it up front.“

Thorough cybersecurity assessments that include utilizing third-party audits can often help avoid these types of issues, said Joe Cardamone, senior information security analyst and North America privacy officer for Haworth. “It’s not an intangible risk. It’s a very tangible thing and true money that can be lost,“ said Cardamone, who has been involved in Haworth’s acquisition of at least six companies. “Treat it like you are buying a used car. I’d still want to look underneath the hood.“