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How to Weave Technology into Your M&A Deal

Jeffery Phillips March 20, 2024

Years ago, mergers and acquisitions were sealed with a handshake. Those involved in the deal met in person and technology was in its infancy.  

Times have changed. As technology becomes a bigger part of doing business, there are many more risks to be considered when a merger is in the works.  

Any business that is considering buying another company or being acquired likely uses technology in some way, so all businesses in the M&A space must include cyber concerns in due diligence. Most M&A deals do not include cyber at this stage or in the final deal. By using the following tips, you could end up in a healthier situation when the deal is done.    

  • Evaluate: The buyer should thoroughly evaluate the seller’s online presence and its vulnerabilities when it comes to being a victim of cybercrime. The outcome can have a significant impact on the value of the seller’s business and how the two are integrated after the deal closes.  
  • Pay attention to the data: Data analytics are becoming increasingly popular in all realms of business, including in M&A deals. Use data and artificial intelligence to uncover issues that might stay hidden under the naked eye or more traditional M&A due diligence procedures.  
  • Come to terms: The buyer can be exposed to cybersecurity problems if they agree to take on existing associated risk. Specify in the terms of the deal what risks the buyer will assume.   
  • Buyer and Seller Beware: Bad actors are always watching, so be careful how much you discuss publicly when an M&A deal is underway. Keep many details to yourself so cybercriminals don’t try to find a way to access the systems of the companies involved as they put their focus elsewhere.  

These steps will enable your business to conduct a more thorough exam of the company under consideration for acquisition. It’s also a way for the mindful seller to find a viable solution for their business and their legacy to continue.  

Transactional Risk Advisors can help you get on the right track. 

To learn more, contact me below:

Transactional Risk Advisors