Enhancing M&A Cybersecurity Strategies: Insights

Enhancing M&A Cybersecurity Strategies

Enhancing M&A Cybersecurity Strategies: Insights from FocusConnect

In the ever-evolving landscape of digital threats, cybersecurity has taken center stage, impacting not only national security but also the foundation of businesses. The year 2023 marked a turning point with several high-profile attacks prompting the Biden administration to prioritize cybersecurity. As a business owner, understanding the significance of cybersecurity, especially during mergers and acquisitions (M&A), is paramount. FocusConnect delves into the vital role of cybersecurity in M&A due diligence and offers insights into why this is crucial for businesses of all sizes.

The Significance of Cybersecurity in M&A:

In the age of digital transformation, businesses rely heavily on technology and data. However, this digital reliance brings forth vulnerabilities that cyber attacker’s exploit. A security breach not only jeopardizes finances but also tarnishes a company’s reputation irreparably. Recognizing these risks, conducting cybersecurity due diligence during M&A becomes essential. This diligence involves understanding how the target business handles data, identifying vulnerabilities, and assessing the potential repercussions of a security breach.  In addition, hackers have found innovative ways to exploit M&A transactions for insider trading. By targeting companies involved in M&A deals, hackers gain access to confidential information on executives, enabling them to execute insider-like trades without being insiders themselves.

Conducting Effective M&A Cybersecurity Due Diligence:

Engaging in M&A requires meticulous cybersecurity due diligence. Here’s how FocusConnect recommends approaching it:

  1. Consult IT Experts: Collaborate with IT experts within your organization to comprehensively assess the target company’s cybersecurity posture.
  2. Ask the Right Questions: Seek answers to critical questions, such as past incidents, existing security measures, pen-testing outcomes, and compliance status.
  3. Previous data breaches: It is critical to know whether or not the company has experienced previous data breaches so all of the appropriate tools can go into place right away to begin prevention.  This needs to be part of the remediation plan.   
  4. Evaluate Compliance: Determine if the target company adheres to industry-specific compliance regulations, ensuring you’re aware of potential compliance challenges.
  5. Remediate: Expand existing IT teams skillsets by complimenting with an outsourced cyber security team to help achieve the goals and keep productivity in place. IT resources inside companies are stretched thin already.  It hard to budget time to fix critical security issues and make change with stretched human resources. 

Cybersecurity During Post-Merger Migration:

As M&A deals progress to the integration phase, cybersecurity remains a priority.  In order to ensure a safe handoff, keep augmentation with the outside IT team going through the handoff process and for several months afterwards.  The new IT team is typically unfamiliar with the nuances of the environment and require cross training.  In most cases, they do not have the additional human resources to manage what has been brought on. 

Implement Multi-Factor Authentication (MFA): Set up MFA for employees to prevent unauthorized access and reduce the risk of compromised accounts.  Policies must be set to enforce regular passwords resets. 

Conditional Access Rules: Establish conditional access rules, utilizing tools like Azure’s report-only mode to understand their impact before full enforcement.

Review Admin Roles: Scrutinize administrative access to ensure privileges are granted only to those who genuinely require them.

Temporary Access Management: Utilize privileged identity management to grant temporary access to sensitive data and monitor activities effectively.

IT transfer process:  Ensure new parent IT is putting into the place their controls for password identification, system access, device patching schedules are maintained, and compliancy standards continue to stay enforced.  

Partnering with FocusConnect:

FocusConnect recognizes the complexity of cybersecurity in M&A. FocusConnect has extensive experience in Microsoft 365, regulated industries, and stands as a trusted partner to guide businesses through the entire M&A process. Contact us today for a consultation on fortifying your cybersecurity strategy and ensuring a seamless transition during M&A endeavors.

In the face of increasing cyber threats, FocusConnect underscores the urgency of robust cybersecurity strategies during M&A. Learning from past mistakes, conducting thorough due diligence, and collaborating with seasoned experts will empower businesses to safeguard their operations, reputation, and future growth in the dynamic digital landscape.