Cybersecurity & Risk Management

By Ringside Talent

February 24, 2025

Mergers and acquisitions (M&A) introduce exciting opportunities for growth, but they also come with heightened cybersecurity risks. Integrating IT infrastructures, consolidating data, and transitioning access controls create vulnerabilities that cybercriminals are eager to exploit. IT leaders play a pivotal role in ensuring that cybersecurity risks are identified, mitigated, and managed throughout the M&A lifecycle.

As part of our Mergers & Acquisitions series, last week we explored post-merger financial integration and how Finance leaders ensure compliance and reporting accuracy. This week, we shift our focus back to IT, diving into the cybersecurity and risk management strategies necessary to safeguard business assets during M&A.

When IT and Finance collaborate on risk management, businesses can strengthen security postures, minimize financial exposure, and ensure compliance—all while maintaining operational continuity.

Why Cybersecurity is Critical in M&A

According to a Reuters report, nearly 60% of acquiring companies inherit cybersecurity vulnerabilities from their target firms, leading to increased risks of breaches, financial loss, and regulatory fines. Without proper cybersecurity due diligence, organizations risk acquiring hidden threats that can have long-term consequences.

Key cybersecurity challenges in M&A include:

  • Assessing inherited security vulnerabilities from the acquired company.
  • Protecting sensitive financial and customer data during system integrations.
  • Ensuring compliance with data protection regulations like GDPR, CCPA, and SOX.
  • Preventing insider threats and unauthorized access post-merger.

IT and Finance teams must work together to evaluate these risks and allocate necessary funding to strengthen security measures.

Key Focus Areas for Cybersecurity & Risk Management in M&A

  1. Cybersecurity Due Diligence

Before finalizing an acquisition, IT leaders should:

  • Conduct a cyber risk assessment to identify vulnerabilities within the target company’s IT infrastructure.
  • Review past security incidents and evaluate incident response capabilities.
  • Ensure third-party vendor security assessments are completed to prevent supply chain risks.

  1. Securing Data During System Integration

Data breaches often occur during system migrations. To prevent exposure, IT teams must:

  • Implement data encryption and secure transfer protocols.
  • Establish zero-trust security frameworks to limit unauthorized access.
  • Work with Finance to fund security tools that enhance monitoring and threat detection.

  1. Managing Compliance & Regulatory Risks

Failing to meet cybersecurity compliance standards can result in hefty fines and reputational damage. IT and Finance must collaborate to:

  • Identify regulatory requirements (e.g., GDPR, SOX, HIPAA) that apply to the merged entity.
  • Implement automated compliance reporting to streamline audits.
  • Ensure cybersecurity investments align with Finance’s risk management strategy.

  1. Post-Merger Risk Monitoring & Incident Response

Even after integration, cyber threats remain a concern. IT leaders should:

  • Establish a continuous risk monitoring system to detect anomalies in real time.
  • Conduct cybersecurity training for employees to prevent social engineering attacks.
  • Develop joint IT-Finance contingency plans to mitigate the financial impact of potential breaches.

Collaboration Between IT and Finance: Strengthening Cyber Resilience

Cybersecurity in M&A isn’t just an IT responsibility—it’s a cross-functional effort. By working together, IT and Finance leaders can:

  • Allocate budgets for cybersecurity enhancements to address inherited risks.
  • Justify security investments by quantifying financial exposure from breaches.
  • Develop a risk-aware culture that prioritizes security throughout the organization.

How Ringside Talent Can Help

At Ringside Talent, we specialize in connecting businesses with IT and Finance professionals who have deep expertise in cybersecurity risk management during M&A. Whether you need CISOs, cybersecurity analysts, IT auditors, or risk management specialists, we can help you build the right cross-functional team to secure your M&A transactions.

Looking Ahead

This Thursday, we’ll explore “Cash Flow & Capital Allocation in M&A”, where Finance leaders discuss strategies for managing working capital, debt repayment, and funding post-merger growth initiatives. Stay tuned as we continue uncovering how IT and Finance leaders work together to drive M&A success!

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