In 2018, the market value of mergers and acquisitions was more than $3.8 trillion and it is still expected to grow by 20 percent in the last quarter of this year. It is also important to know that data insecurity, cyber threats, and breach of contracts have landed companies in severe situations, incurring huge losses. However, the introduction of cybersecurity due diligence in the business world has been a game-changer.
It provides better knowledge about the risks and liabilities of the merging companies to both the parties involved in the M&A contract. According to a study, 93% of the business owners consider cybersecurity evaluations as an essential element of their decision-making process.
So here are the top 3 Reasons why cybersecurity due diligence is important:
- Identification And Analysis Of The Digital Assets: The Cybersecurity due diligence helps the acquirer to identify and analyze numerous digital assets, list down the cyber threats, perform the process of penetration testing and conduct the DNS audit. The gathered information helps to study the possible vulnerabilities of the M&A contract, test the degree of security level, and accordingly structure the outcome of the deal.
- Mitigate Future Risks: Cybersecurity due diligence helps to constantly assess the entire transaction process, detect any susceptible activity and take actions against the same. If a particular cybercrime is uncovered, the cybersecurity expert performs thorough assessments on behalf of the company and designs a cyber response program to tackle the problem. The experts also clearly differentiate the cybersecurity challenges and risks involved in the M&A contract and demonstrate the set of procedures to overcome the issue.
- Protection Of Intellectual Property Rights: In most of the M&A contracts, when the intellectual property of the buyer is at stake, it ultimately increases the threat of data theft. Since the sensitive data or property of the target acquisition is usually at stake, it can hamper the market position as well as the reputation of the company. However, cybersecurity due diligence can help to confidentially store sensitive information and provide limited authorized access to the concerned parties.
A cyber risk assessment provides detailed insight that traditional due diligence can never provide. So if you are looking for some reliable service provider in this arena, then Elijaht cybersecurity due diligence is the way to go. They can help you know the internal and external business environment clearly and ultimately, reduce the cyber risks in business deals.