Technical Security Assessments for M&A

A technical security assessment during Mergers & Acquisitions performs due diligence to identify risks that could affect the valuation or viability of the deal. Unlike a standard audit, it focuses on material risks and integration challenges.

Access Models

Limited Access (Pre-Signing) typically occurs in the early stages where access is restricted. The assessment relies on reviewing documents in a Data Room, attending management presentations, and interviewing the target's CISO. External passive scanning (OSINT) can provide verification without requiring access. Expanded Access (Post-Signing / Pre-Closing) happens once the deal is signed but before closing. Access may expand to include configuration reviews, vulnerability scans (with permission), and deeper system walk-throughs to validate the initial findings.

Assessment Domains

Assessment covers several critical domains. Security Governance assesses the organizational structure, policies, and awareness programs to determine if security is cultural or just on paper. Technical Security involves reviewing network architecture, identity and access management (IAM), endpoint protection, and data security controls. Security Operations evaluates monitoring capabilities, incident response readiness, and backup strategies. Compliance verifies adherence to regulatory requirements (GDPR, HIPAA) and reviews audit history. Finally, Breach History involves investigating past incidents, breach notifications, and any ongoing litigation or insurance claims.

Red Flags

Critical Findings, such as evidence of an active undetected breach, can be a deal-stopper. Unpatched critical vulnerabilities on internet-facing systems indicate negligence, and a lack of MFA for privileged access is a major risk. Systemic regulatory non-compliance can attract huge fines. Significant Concerns include outdated "End of Life" infrastructure, which represents a massive hidden cost, extensive Shadow IT that complicates integration, and a lack of centralized logging which means visibility is effectively zero.

Risk Quantification

For M&A, risks must be translated into money. For each finding, the assessor estimates the "Remediation Cost" (one-time fix) and the "Ongoing Cost" (operational run rate). These figures feed directly into financial models to adjust the deal valuation or escrow calculations.