Cybersecurity is a large concern to every company and individual and its related crimes will continue to rise. One report predicts that the average loss to companies could worth $5.2 trillion annually during the period of 2019-2024.
From small to large businesses, owners, and IT professionals at global corporations well aware that threats occur every day. Staying ahead of those menaces is the only way to secure proprietary data, network functionality, and network integrity. In mergers and acquisitions (M&A) industry, cybersecurity issues are progressively becoming a concern and that space can threaten deals or haunt buyers long after the deal is done, a new industry survey shows.
In a Forescout technologies Inc. survey, more than 2,700 information technology and business decision makers from 7 countries participated. Of those, 53% of respondents reported that their organization had unexpectedly experienced a grave cybersecurity issue or incident that put an M&A deal in danger. Conversely, 65% reported that they had experienced purchasers’ contrition because of cybersecurity concerns after closing a deal.
Issued earlier this week, the Forescout technologies’ survey findings demonstrate that taking the time to demeanor cybersecurity assessments is vital before and during an acquisition. It’s also significant in case of finalizing the deal gets delayed. Chief Technology and Public Officer at Forescout, Julie Cullivan says, “Cybersecurity is a challenge for every organization, and risk factors are changing all the time. It’s about making sure you put as much energy into it up front.”
Recent Events in M&A
Cyberattacks on companies or industries can do more than disrupt laws and regulations. A business that is being acquired or generally exploring a sale often desires a maximum return and the acquirer who took that company wants to ensure its target is valued appropriately and is a sustainable asset.
Recent acquisitions in companies accentuate the perils that cyber risks can pose to a business’s standing and bottom line.
An acquisition of Yahoo’s internet properties in 2017 by Verizon Communications Inc., where Verizon cut its offer by $350 million, meaning nearly 7% of the original price after Yahoo’s disclosure of two massive breaches in previous years. Moreover, the part of Yahoo that wasn’t sold to Verizon agreed to inherit 50% liability from any future lawsuits related to the data breaches, according to a PwC report.
In the same regard, Marriott International Inc. assumed a massive security risk, including a breach, after acquired Starwood and was unveiled just days after the deal was declared.
Cyber Attack risks not only put in jeopardy these types of companies. Recently, Asco Industries’ Spirit AeroSystems Holdings Inc., which agreed to acquire in May last year, was slammed by a large-scale ransomware attack. It caused a solemn disruption of Asco’s activities and its global sites in Belgium, Germany, Canada, and the US were stopped.
Though Spirit AeroSystems received EU approval for the deal in March, the acquisition has yet to be completed.
Cybersecurity consists of countless ground, ranging from website design, authentication progressions, protection from malware and ransomware, to data breaches, and even physical tampering with servers and network-connected devices.
According to the Senior Information Security Analyst and North America Privacy Officer for Haworth Inc., Joe Cardamone, “Thorough cybersecurity assessments that include utilizing third-party audits can often help avoid these types of issues.” Based in Holland, Michigan, Haworth Inc. is a designer and manufacturer of office furnishing products. As a Forescout customer, Haworth revamped its acquisition policy around 5-year ago to include information security.
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