Cyber Due Diligence

in Mergers and Aquisitions

Cyber Due Diligence in Mergers and Aquisitions

Understanding Traditional Cyber Due Diligence

Traditional M&A cyber due diligence involves reviewing a target company’s cybersecurity documentation, procedures, and tools. This approach, while comprehensive in data collection, often limits itself to merely confirming the existence of certain cybersecurity measures—essentially “checking the box.” This can result in an overwhelming amount of information that may not necessarily translate into a useful understanding of how these measures are implemented or their effectiveness.

Identify Threats Prior To Closing

Ransomware Susceptibility

Existing Critical Vulnerabilities

Past and Active Dark Web Threats

Cyber Threat Due Diligence Methodology

At BlackSwan Cyber, we have developed the Cyber Threat Due Diligence methodology, built to address the unique challenges we have seen in M&A transactions. Our process goes beyond conventional cyber due diligence by deploying a strategic, tiered approach that not only assesses a target’s cybersecurity posture but also identifies, assesses, and prioritizes potential material threats to the transaction.

Our proactive methodology equips our clients with critical insights, enabling them to make well-informed decisions, effectively mitigate risks, and confidently secure their investments. Below, we detail the steps involved in our process.

Cyber Threat Due Diligence Process

Phase

Initial Assessment & Portfolio Benchmarking

Overview:

The initial phase of our Cyber Threat Due Diligence process is critical in establishing a cybersecurity baseline for the target company. This assessment is critical not only for gauging the current cybersecurity measures in place but also for comparing these measures against the minimum thresholds set by your firm’s broader investment portfolio. This comparison is essential for identifying risks that deviate from your firm’s established standards, thereby increasing leverage and establishing a consistent evaluation methodology. This standardized approach not only aids in negotiations, but also ensures transparent communication with regulatory bodies and other stakeholders. By demonstrating adherence to consistent cybersecurity standards, your firm can reinforce its commitment to maintaining a high standard of cybersecurity and governance across its investments. Here’s a detailed breakdown of this phase:

Expedited Assessment:

Using our Cyber Maturity Assessment Platform (CyMAP), we conduct a rapid yet thorough review of the target’s existing cybersecurity policies, procedures, and tools. This step evaluates whether the existing cybersecurity controls meet the baseline standards required for compliance with your firm's minimum requirements. Should these controls fall short, a more comprehensive analysis will be initiated to address any deficiencies and ensure alignment with your strategic security objectives.

Assessment Tool Options:

Although CyMAP is preferred for its efficiency and analysis capabilities, alternative tools such as detailed checklists or other custom evaluation tools may be used to better align with specific requirements of your firm.

Scoring and Comparison:

Through the functionality of CyMAP, the target company will respond to a series of questions covering essential cybersecurity control areas. Each area is scored, and these scores are then benchmarked against the broader investment portfolio of the private equity firm. This benchmarking process facilitates the quick identification of potential cybersecurity concerns and areas that require further attention.

Phase

Threat Analysis

Overview:

Expedited Assessment:

Assessment Tool Options:

Scoring and Comparison:

Phase

Reporting and Strategic Recommendations

Overview:

Expedited Assessment:

Assessment Tool Options:

Scoring and Comparison:

Phase

Remediation Oversight & Management

Overview:

Expedited Assessment:

Assessment Tool Options:

Scoring and Comparison:

A cybersecurity platform that meets the need of private equity firms.

Contacts

Info@blackswancyber.com

101 Jefferson Drive
1st Floor Menlo Park
CA 94025

Speak with our M&A Cybersecurity Advisors

At BlackSwan Cyber, we understand the critical intersection of cybersecurity and M&A strategy. Let’s discuss how our work can secure and streamline your next transaction.

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