image Protecting Your Data During an M&A 

Protecting Your Data During an M&A 

Protecting your company’s data during a merger and acquisition is a top concern. During an M&A, the businesses involved will share quite a lot of data with one another, leaving both companies at risk for breaches, privacy concerns, and legal liabilities. Securing and protecting all data before you move forward with an M&A is essential to mitigate potential vulnerabilities. 

Understanding the Importance of Data Security During an M&A 

There’s a large difference between a merger and an acquisition, but it’s essential to understand the importance of data security during either – especially if you store personal information about your customers. Your business may collect anything from general demographic information to locations and addresses. This information may contain banking records, credit card numbers, and customers’ private health information. 

If that information gets exposed because your company did not properly protect it, there can be detrimental consequences. A data breach can leave your company exposed to lawsuits and public relations issues that can damage your brand image, both of which can have serious financial consequences. Furthermore, the overall integrity of the merger may be compromised, especially if these details are unintentionally revealed to people with bad intentions. 

Key Steps to Safeguard Sensitive Information During a Merger 

The issues listed above represent some of the security considerations in M&A transactions. Taking the following steps can help your organization safeguard sensitive information during the process. 

One important component of protecting data during a merger is enacting a solid, unbreakable encryption method. This will prevent unauthorized individuals from accessing sensitive information and stealing or corrupting it. 

Security experts recommend implementing two-factor authentication for any platforms or log-ins. This feature requires that people trying to access certain data use two forms of identification to log in. Some of the identification requirements include entering a password, using a form of biometric identification, or answering a unique security question. 

It’s essential to have a process in place to flag suspicious behavior. You can catch unauthorized activities or suspicious behaviors if your business monitors and audits what users are doing. There are tools you can use to support this kind of monitoring. 

Restrict access to the most sensitive information by creating granular access control. You can also place highly sensitive and confidential information in locked, password-protected files and folders. Be sure your company uses the most secure channels for communicating material. During an M&A, you can use SSL/TLS certificates to secure the transition of materials. 

Laptop shows a picture of data with a padlock on top.

Preventing Data Breach During Mergers and Acquisitions 

When unauthorized parties gain access to any of your company’s stored data, problems arise. Best practices for data protection during an M&A start with a solid cybersecurity protocol and steps for prevention. Here are some of the latest thoughts on protecting your data. 

Firstly, minimize data by cleaning up any duplicate content or redundant files and information. The less data you must work with, the less chance of a breach. Always keep a clear catalog and record of what data you do have on file. Identify and classify the information your business collects. This helps you stay vigilant about what needs to be protected. 

Ensure your organization is up to date with data regulatory compliance. Check with all governing bodies for potential new laws or regulations that must be followed. This includes document procedures and regulatory standards. Since laws change often and new ones get added, this step makes the transition smoother. 

Identify and mitigate any known risks. If you suspect your business is already at risk of being compromised, it is vital to take action to rectify it before a merger & acquisition. 

Lastly, you should have a clear disaster recovery and response plan in place, complete with instructions for what needs to happen if a breach occurs. This should incorporate a strong backup and recovery protocol. 

Prepare for Your Acquisition by Protecting Your Data 

Now that you know more about the risk of a security breach during an M&A, you can prepare your organization. Protecting vast amounts of data during an acquisition is of utmost importance. By establishing a plan of action and acquisition protocol, your business will be on the path to a safe and secure transition. 

At Confie, we are proud of our strong record of successful mergers and acquisitions. You can discuss your company’s M&A with a qualified advisor at Confie. We will work with your organization to provide a viable solution. With our well-established company, you can be assured of success. Get in touch with one of our experts for more details. Contact us today if you are thinking about being acquired by us or call us at (714) 252-2500