The Emerging Need for Cybersecurity Diligence in M&A

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Posted by Shilpi Gupta & Stuart D. Levi, Skadden, Arps, Slate, Meagher & Flom LLP, on Tuesday, May 2, 2017

Editor’s Note: Shilpi Gupta and Stuart D. Levi are partners at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden publication by Mr. Gupta, Mr. Levi, and William Ridgway.

Cybercrime has emerged as one of the foremost threats a company faces. As a result of a few keystrokes, a company may find its customers’ data sold on the dark web, its intellectual property in the hands of a competitor or its operations paralyzed by ransomware. It should come as little surprise, then, that cybersecurity has become a key risk factor in mergers and acquisitions.

A 2016 survey by West Monroe Partners and Mergermarket found that 77 percent of top-level corporate executives and private equity partners reported that the importance of cybersecurity at M&A targets had increased significantly in recent years. Given this trend, executives and directors contemplating acquisitions should consider the following cyber-related issues when conducting due diligence.

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May 02, 2017 at 07:15PM

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