Whether making or realising an investment, the first 100 days following the announcement of an acquisition require heightened vigilance to cyber risk. Sophisticated threat actors can exploit weaknesses exposed during the M&A process, including the exchange of sensitive data during due diligence, the integration of IT systems, and disruption to workflows and employees.
Preparing PortCo for Exit
Intellectual Property
Identifying key IP within a business, understanding ownership, reviewing rights agreements, and implementing appropriate protections.
Data Protection
Conducting data protection audits and reviewing policies and procedures.
Warranties and Covenants
Clearly defining responsibility for past and future cyber events, and ensuring these obligations are not breached.
Continuous Breach Monitoring
Target / Portfolio Company
- Data leaks, credential exposure and ransomware chatter
- New vulnerabilities in exposed systems
- Publicly disclosed breaches that could affect valuation
Critical Suppliers and Technology Vendors
- Cloud and SaaS Providers
- Outsourced IT Providers
- Managed Service Providers (MSPs)
Regulatory / Compliance Triggers
- Monitor for fines, investigations or regulatory actions against the target, including GDPR, SEC and FCA matters
Other Stakeholders
- Advisors (lawyers, bankers)
- Other Portfolio Companies (where infrastructure is shared)
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Insights
Why Cybersecurity Due Diligence is Critical to Deal Completion
It’s a common story: after months of meticulous financial, operational, and market analysis, a critical finding emerges in the final weeks before deal closure – threatening what seemed like a near-certain transaction with a three-month delay.
JLR Cyber Attack: What it Means for Private Equity, Credit, and Equity Investments
From the iconic E-Type Jaguar to images of the late Queen driving modern Range Rovers on her estate, JLR has long held a uniquely British place in the national consciousness, even under Tata ownership. The incident has affected the owners of the business, the supply chain, and customers, and offers learnings for the Private Equity (PE) industry.
Impact of Cyber and Operational Resilience on Private Equity and Their Portfolio Companies
Implementing cyber and operational resilience measures is a strategic imperative for PE firms and their PortCos, enabling them to reduce the impact of cyber risks on asset valuations.
Cyber Security Checklist for Private Equity
10 essential steps to improve cyber security, protect portfolio investments, and maximise exit value.