The cybersecurity condition of a seller of an eDiscovery or Legal Technology company can have a significant impact on the risks and costs to the buyer as well as to the transaction itself. Despite this factor, cybersecurity due diligence is an often overlooked aspect in the process of evaluating whether to go forward with a merger or acquisition.
From a buyer’s perspective, cyber security due diligence gives a buyer a better understanding of the cyber security capability of the company to be acquired, as well as any risks the acquisition might incur. This knowledge also has helps both parties with future integration processes.
From a seller’s perspective, the advantages of performing cybersecurity due diligence before becoming acquired can include the opportunity to:
- Identify and fix problems before they are made issues by the buyer’s due diligence
- Improve the quality of the Confidential Information Memorandum
- Create a greater valuation
- Reduce the due diligence time frame and create a smoother transaction