Cyber Due Diligence for M&A

Cybersecurity risk can significantly affect deal value, integration timelines, and regulatory exposure. Acquiring a company with unaddressed vulnerabilities, past breaches, or poor data governance can result in costly remediation, reputational damage, or legal liability post-close. Identifying these risks early helps protect the investment.

A cyber due diligence assessment typically includes a review of network security architecture, data protection measures, access controls, incident response plans, vendor relationships, cloud environments, and compliance with frameworks such as HIPAA, GLBA, or GDPR. Breach history and employee awareness training may also be evaluated.

A cybersecurity review should be conducted by independent professionals with experience in M&A, information security, and regulatory compliance. These experts can objectively assess the target’s risk profile and provide strategic recommendations for legal, technical, and executive stakeholders.

Cyber due diligence should occur early in the transaction lifecycle—ideally during the initial diligence phase—before terms are finalized. Early identification of cybersecurity risk allows buyers to adjust valuation, negotiate remediation, or include protections in the purchase agreement.

Yes. Discovering significant cybersecurity gaps, compliance failures, or previous breaches can lead to changes in valuation, altered deal terms, or additional escrow requirements. In some cases, findings may delay or even terminate a transaction if the risk is deemed too great.