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M&A is back on the rise, with deals in 2018 exceeding 2017 and 2019 expected to be a good year for the US and Canada. The Yahoo and Marriott deals have shown that poor due diligence can yield some unintended consequences to shareholder value. Numerous studies have shown that well over 50% of M&A deals fail to boost shareholder returns. One reason being poor due diligence.(https://lnkd.in/eQdyfnM) Cyber adds another set of risks to the mix, with a cocktail of issues which are proven to impact shareholder value.
As I reported previously with a lack of skilled resources in the market place and boards and NEDs being ill-equipped to manage cyber risk. It makes the M&A process much harder. But there are a wealth of questions which can be asked through the DD process. The acquirer can run their own tests on the acquisition target to place a level of assurance on the deal, for example running an internal and external pen test. It’s incumbent on the seller to ensure that their ‘house is in order’, if they want to get top dollar. But not in their interest to allow to deep a dive into their IT, you don’t know what it may find.
The good old adage ‘buyer beware’ should be forefront of mind in our digitally connected world.
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