During mergers and acquisitions (M&A), many organizations foolishly overlook the critical importance of cybersecurity risk, focusing predominantly on financial risks.
This oversight often leads to cybersecurity being marginalized — not for the lack of relevance to the department, but due to the unrecognized potential pain that businesses may endure. The failure to prioritize this aspect has historically led to costly breaches, thereby reinforcing the notion that leadership can indeed be a formidable insider threat.
Why take the time to mention this? The underestimation of cybersecurity risks has led to some of the most significant breaches in terms of cost and scale. In numerous instances, particularly in unnamed industries, this neglect has allowed cyber vulnerabilities to escalate uncontrollably. Security leaders, especially those from companies being acquired, may assert their systems are free of malware or technical debts. Yet, post-acquisition assessments often reveal that hostile nation-states or criminal groups have compromised these very systems. This realization serves as a stark reminder that a seemingly problem-free environment can be deceiving.
Reevaluating processes pre-acquisition and post-merger
The aftermath of significant cybersecurity breaches has shone a harsh light on the critical vulnerabilities that can be inherited through M&A. These incidents underline a perilous oversight in the M&A process: the underestimation of tech debt and poor integration of digital systems. In response, a new approach is urgently needed to evaluate and merge digital assets effectively. This approach must encompass not only a rigorous assessment of a company’s cybersecurity posture pre-acquisition, but also a strategic, holistic integration post-merger with a keen focus on actively mitigating tech debt.
The first transformative step in this journey is the reevaluation of due diligence processes. Cybersecurity due diligence must become as integral as financial and operational reviews, delving deep into the target company’s security protocols, incident response history, and compliance standards. However, simply identifying the presence of tech debt is insufficient. Acquirers must demand transparent access to all cybersecurity practices, past breach incidents, and ongoing threat assessments. Enhanced threat hunting before network integration is essential, as is a solid plan for the standardization and integration of core systems like authentication, provisioning, collaboration, email, and shared cloud services. This exhaustive investigation serves dual purposes: quantifying potential risks and setting the stage for their mitigation as an integral component of the merger’s value proposition. Organizations that do not mandate the CISO, along with a trusted third-party, to present on the resident tech debt, the likelihood of current or attempted adversarial activity, and current cybersecurity risks are best defined by TEN18 as negligent.
Post-acquisition, the challenge of integrating digital infrastructures presents an opportunity to eradicate inherited vulnerabilities systematically. A strategic integration plan, focusing on the prioritization and remediation of tech debt, becomes essential. This is not a task for the IT department alone but a mission-critical objective that requires the mobilization of a dedicated cross-functional team. The team’s mandate is clear: to fuse the technological landscapes of the merging entities into a unified, secure digital infrastructure.
Using AI to expose vulnerabilities and eliminate redundancies
Employing cutting-edge technologies such as artificial intelligence (AI) and machine learning can significantly expedite this process. These technologies are crucial because they offer the speed and scalability needed to identify vulnerabilities across vast digital landscapes efficiently. AI algorithms excel in detecting patterns and anomalies that might elude human analysts, making them invaluable for rapidly assessing the security posture of newly acquired systems. Machine learning, in particular, adapts over time, improving its ability to flag potential security threats as it processes more data.
This strategic, tech-forward approach not only secures the merged entity, but also strengthens the business case for cleaning up duplicate systems and, frankly, discarding the obsolete. There is no better opportunity to demonstrate value, minimize risk, and eliminate outdated practices. It is essential to secure short-term resources to address these long-term risks effectively. When discussing these needs, emphasize the potential for loss prevention rather than just cost savings. Any issue that does not garner the necessary attention, or that is overlooked or deferred, must be meticulously documented. These records should be shared with the M&A steering committee, incorporated into the risk register, and reviewed by the Audit department.
Cultivating a unified security culture
Yet, the integration of technologies and systems is only part of the equation. The true cornerstone of post-merger cybersecurity resilience is the cultivation of a unified cybersecurity culture. This requires a profound cultural shift where every employee, from the boardroom to the break room, internalizes the importance of cybersecurity vigilance. To facilitate this, shared team meetings should be held regularly to discuss security practices and incident communication standards. Escalation procedures must be clearly understood and readily executable, with defined availability expectations for all team members.
Additionally, immersive training sessions, live-action cybersecurity drills, and open forums for discussing potential threats should become the norm. Such initiatives encourage an ongoing dialogue about security, where every employee has a voice. For instance, asking employees what processes or systems they would eliminate can uncover hidden risks and promote proactive attitudes towards security.
This cultural transformation ensures that cybersecurity transcends being merely a department or a set of policies. Instead, it becomes a fundamental, pervasive ethos across the newly formed organization. To support this transformation, it may be prudent to temporarily maintain dual CISO roles. This approach allows for a period of overlap where two security leaders can merge their teams’ best practices and cultural elements effectively. The dual leadership facilitates a smoother transition and ensures a comprehensive understanding of the inherited and new security challenges. Eventually, this leads to a unified security team, where the integration of methods and personnel is guided by shared goals and mutual respect.
Cybersecurity as a priority in the new era of M&A
Reflecting on recent cybersecurity breaches provides a blueprint for a new era of M&A. This blueprint advocates for an unprecedented integration of cybersecurity considerations into every phase of the M&A process, from due diligence to post-merger integration and beyond. It calls for a radical shift in perspective, treating cybersecurity not as a line item on a checklist but as a strategic pillar essential to the success and sustainability of the merged entity. The lessons of 2024, while born from challenges, illuminate a path forward that can transform M&A, ensuring that organizations are not only resilient in the face of evolving cyberthreats but are poised for secure, sustainable growth in the digital age.
About Exabeam
Exabeam is a global cybersecurity leader that delivers AI-driven security operations. The company was the first to put AI and machine learning in its products to deliver behavioral analytics on top of security information and event management (SIEM). Today, the Exabeam Security Operations Platform includes cloud-scale security log management and SIEM, powerful behavioral analytics, and automated threat detection, investigation and response (TDIR). Its cloud-native product portfolio helps organizations detect threats, defend against cyberattacks, and defeat adversaries. Exabeam learns normal behavior and automatically detects risky or suspicious activity so security teams can take action for faster, more complete response and repeatable security outcomes.
For more information or to order test solutions
