Rishi Rahalkar - 10.05.202320230510

Secure your M&A Success: How to Overcome Cybersecurity Risks and Protect your Valuable Assets

In today’s digitally interconnected world, business owners, executives, and cybersecurity specialists must be increasingly mindful of the cybersecurity risks associated with mergers and acquisitions (M&A). As companies continue to seek growth and expansion opportunities through M&A, the potential for cyber threats to derail transactions or expose sensitive data is on the rise. Understanding the importance of conducting a thorough cybersecurity risk assessment before acquiring a new company is crucial. Without a comprehensive assessment, acquiring companies may inadvertently inherit unknown vulnerabilities, putting their entire organisation at risk.

This article will explore the advantages of utilising AvePoint Policies & Insights (Pi) as a proactive method for managing sensitive data and ensuring secure collaboration in the M&A process. Additionally, it will demonstrate how this solution is beneficial when merging two Microsoft 365 tenants as part of a merger and acquisition.

The Importance of Cybersecurity Risk Assessments in Mergers and Acquisitions (M&A)

Mergers and acquisitions (M&A) present unique cybersecurity challenges due to the integration of different IT infrastructures, M365 tenants, networks, and data management systems. These complex processes can expose vulnerabilities and create potential entry points for cyberattacks. Conducting a comprehensive cybersecurity risk assessment before acquiring a new company is essential for identifying potential weaknesses, preventing data breaches, and protecting valuable assets. By addressing these risks early in the M&A process, organisations can ensure a smoother transition and mitigate the potential negative impacts on their business operations and reputation.

When conducting a cybersecurity risk assessment during an M&A process, there are several key areas to consider:

Data Security: Assess the target company’s policies and procedures for protecting sensitive data, including personal information, intellectual property, and trade secrets. This may involve reviewing encryption practices, data storage and disposal policies, and access controls.
Network Security: Evaluate the target company’s network architecture, including its firewalls, intrusion detection systems, and other security measures in place to protect its infrastructure from unauthorised access and potential threats.
Incident Response: Analyse the target company’s incident response plan to ensure it has an effective strategy in place for identifying, containing, and remediating cybersecurity incidents. This includes evaluating its incident response team’s capabilities, communication protocols, and available resources.
Compliance: Ensure the target company complies with relevant industry regulations and standards, such as General Data Protection Regulation (GDPR), Health Insurance Portability and Accountability Act (HIPAA), or Payment Card Industry Data Security Standard (PCI-DSS). Assess its history of compliance-related incidents, adherence to the Mandatory Breach Disclosure legislation, and potential penalties or fines.
Third-Party Risk: Evaluate the target company’s relationships with third-party vendors, suppliers, and partners, as they may introduce additional cybersecurity risks. Assess the target company’s processes for managing and monitoring these relationships and their contractual obligations regarding security.

Challenges of Conducting a Risk Assessment in M&A

Conducting a risk assessment during M&A activities can be a complex and challenging process. Organisations face several obstacles that may hinder their ability to identify and address potential cybersecurity risks accurately. Some of these challenges include:

Limited Access to Information: During M&A negotiations, organisations may encounter difficulties in obtaining comprehensive information about the target company’s IT infrastructure, security practices, and data management systems. This limited access to information can hinder the assessment of potential vulnerabilities and the overall understanding of the target company’s cybersecurity posture.
Time Constraints: M&A transactions often involve tight deadlines, which can place significant pressure on organisations to complete the risk assessment process quickly. In such time-sensitive situations, there is a risk of overlooking critical vulnerabilities, leading to potential security breaches and data loss following the acquisition.
Incomplete or Inaccurate Data: During the M&A process, organisations might face incomplete or inaccurate data while using various tools and manual methods for data discovery. Typically, the acquiring organisation lacks complete details of the target company’s Microsoft 365 tenant. This situation may hinder the execution of a comprehensive and accurate risk assessment, potentially leaving some security risks undetected.
Resource Constraints: Organisations may face resource constraints during the M&A process, with limited personnel and budget available for conducting a comprehensive risk assessment. These constraints can make it difficult for organisations to thoroughly evaluate the target company’s cybersecurity posture and implement necessary security measures.
Legal and Regulatory Compliance: M&A activities often involve navigating complex legal and regulatory environments, impacting the risk assessment process.

To overcome these challenges and effectively assess cybersecurity risks during M&A activities, organisations should consider leveraging solutions like AvePoint Policies & Insights, adopting best practices, and collaborating with experienced cybersecurity professionals.

AvePoint Policies & Insights: A Proactive Approach to Cybersecurity in M&A

AvePoint Policies & Insights is a powerful solution enabling organisations to proactively manage sensitive data and secure collaboration, ensuring a smooth and secure M&A process. Pi helps organisations effectively assess their cybersecurity risks and vulnerability when merging two different IT infrastructures. Pi also automates risk assessment to an extent, making it easier for informed decision-making.

Key features and benefits of AvePoint Policies & Insights

Automated Risk Assessments: Pi automates the risk assessment process by scanning the target company’s Microsoft 365 environment for potential vulnerabilities, misconfigurations, and compliance issues. By automating this process, organisations can quickly and accurately assess the target company’s cybersecurity posture, saving time and resources.
Customisable Policies: Pi allows organisations to create and enforce customisable policies based on their specific security, compliance, and privacy requirements. These policies can be applied to the target company’s Microsoft 365 environment during the M&A process, ensuring that both companies adhere to a consistent set of security standards.
Compliance Scoring: Pi provides a compliance scoring feature that evaluates the target company’s Microsoft 365 environment against a wide range of industry-specific regulations and standards. This helps organisations understand the target company’s compliance posture and identify any potential gaps requiring remediation before the acquisition is finalised.
Continuous Monitoring and Insights: Pi offers continuous monitoring of the target company’s Microsoft 365 environment, providing real-time insights into potential vulnerabilities and risks. This enables organisations to proactively address any issues that arise during the M&A process, ensuring a smooth and secure integration.
Data Loss Prevention (DLP) Integration: Pi works with Microsoft 365’s existing DLP features, helping organisations monitor and safeguard important data during the M&A process. By utilising these integrated DLP capabilities, organisations actively decrease the likelihood of data breaches and ensure the protection of their essential information.
Incident Management: Pi provides a centralised incident management dashboard that helps organisations track and manage security incidents in the target company’s Microsoft 365 environment. This feature enables organisations to quickly respond to and remediate any security incidents during the M&A process, mitigating potential risks and ensuring a secure integration.
Granular Reporting: Pi offers granular reporting capabilities that help organisations gain a detailed understanding of the target company’s Microsoft 365 environment. These reports provide valuable insights into potential risks and vulnerabilities, allowing organisations to make informed decisions about the acquisition and develop effective strategies for managing cybersecurity risks.

In conclusion, cybersecurity risk assessments are essential in the M&A process due to the rapid evolution of the digital landscape Pi provides a powerful solution helping organisations overcome the challenges of assessing and managing cybersecurity risks during mergers and acquisitions. With PI’s features, organisations can automate risk assessments, enforce customisable policies, monitor compliance, and safeguard sensitive data, ensuring a smooth and secure integration.

As M&A activities continue to play a crucial role in today’s business world, adopting proactive approaches to cybersecurity like Pi is essential for protecting valuable assets and preserving organisational reputations. In doing so, businesses can confidently pursue growth opportunities while effectively mitigating the potential risks that come with integrating different IT infrastructures, M365 Tenants and data.

Not sure where to start? If you’re uncertain about the initial steps, consider our MapFOR offering from our advisory team. We begin by getting to know your data and using Pi to discover the contents across both tenants. Collaborative workshops will then use findings from Pi and compliance scores as input for brainstorming the next steps and actions required before commencing the migration.

The outcome of MapFOR is a roadmap including the findings, information management decisions, phases, and any gaps between the actual data and the policies or compliance requirements organisations must adhere to. The roadmap also highlights rough timelines, resources, and governance rules required to be in place during migration together with risk mitigation strategies.