M&A Security Due Diligence
Don't let security issues kill your deal or tank your valuation. Get an independent security assessment before the LOI, not after problems surface in due diligence.
Security kills deals
74% of buyers worry cybersecurity will derail M&A deals. 80% uncover data security issues in targets. Many face delays, haircuts, or walkaways.
Impact of Security on M&A
7-12%
Average valuation reduction reported in deals where significant cyber issues are uncovered during due diligence.
$350M cut
Verizon reduced the Yahoo acquisition price by $350M after disclosure of massive data breaches.
21% of deals
Estimated share of M&A transactions that are delayed, repriced, or abandoned due to cybersecurity issues.
6-12 months
Typical core integration window - often extended when buyers inherit insecure infrastructure that needs remediation.
We serve both sides of the deal
Whether you're buying or selling, security due diligence protects your interests.
For Buyers (PE, Corp Dev)
Uncover hidden security risks before wiring capital. Quantify remediation costs and integration threats to protect your thesis.
For Sellers (Exit Prep)
Fix issues before buyers discover them. Ship with truth to diligence clean and negotiate from strength.
What we assess during due diligence
A comprehensive technical and organizational security review focused on material risks and deal-breakers.
Infrastructure Security
- Network architecture and segmentation
- Cloud security posture (AWS, Azure, GCP)
- Exposed services and vulnerabilities
- Patch management maturity
- Data center security (if on-prem)
- Disaster recovery capabilities
Application Security
- Web application security testing
- API security assessment
- Mobile app security (if applicable)
- Third-party integrations
- Secure development practices
- Known vulnerability inventory
Data Protection
- Sensitive data inventory and classification
- Encryption at rest and in transit
- Access control effectiveness
- Data retention and disposal
- Backup and recovery procedures
- Data breach history and response
Compliance & Governance
- Regulatory compliance status (SOC 2, ISO, PCI, HIPAA)
- Outstanding audit findings
- Policy and procedure documentation
- Security awareness program
- Vendor risk management
- Compliance roadmap and gaps
Identity & Access
- IAM architecture and controls
- Privileged access management
- Multi-factor authentication coverage
- Access review procedures
- Contractor/vendor access management
- Orphaned accounts and excessive privileges
Incident Response & Monitoring
- Security operations capability
- SIEM and monitoring coverage
- Incident response procedures
- Past security incidents
- Detection and response maturity
- Forensic readiness
How our M&A security engagement runs
Same approach we use on red-team and penetration engagements, but streamlined for M&A timelines and aligned with both buyer and seller objectives.
01
Initial Contact & Discovery
Confidential first conversation with deal sponsors to understand transaction stage, diligence deadlines, buyer/seller dynamics, and any red lines before we dive in.
Deliverable: Shared understanding of objectives, timeline pressure, and whether we're the right diligence partner.
02
Scoping & Planning
Deal context, investment thesis, and risk tolerance shape the rules of engagement. We align with counsel, create access plans, and sync to diligence deadlines.
Deliverable: Buyer focus: clarity on deal-breakers and risk appetite. Seller focus: access checklist and data room prep plan.
03
Documentation Review
We triage policies, past audits, incident reports, compliance artifacts, and architectural diagrams to surface obvious red flags before hands-on testing.
Deliverable: Annotated documentation findings with buyer questions and seller positioning guidance.
04
Technical Assessment
Penetration testing, architecture analysis, configuration review, and vulnerability assessment on the assets that influence valuation or integration risk.
Deliverable: Validated technical findings mapped to materiality, with remediation estimates for both sides.
05
Stakeholder Interviews
Security, engineering, IT, and compliance leaders walk us through operations, tooling coverage, and culture to gauge maturity beyond paperwork.
Deliverable: Capability readout highlighting buyer confidence signals and seller communication gaps.
06
Findings & Risk Assessment
We quantify remediation effort, rank risks by deal impact, and map integration dependencies so execs understand the true cost of ownership.
Deliverable: Materiality matrix with valuation impact, remediation budget, and integration blockers.
07
Reporting & Presentation
Executive narrative plus technical appendix, risk ratings, and next-step decisions. Delivered live so both parties can challenge and align.
Deliverable: Board-ready deck, technical appendix, and go/no-go talking points for diligence committees.
08
Post-Close Support (Optional)
If the deal proceeds, we stay engaged to oversee remediation, integration sequencing, and day-one security operations.
Deliverable: 90-day integration roadmap with joint owner assignments and measurable security milestones.
What you receive
Comprehensive documentation designed for board presentations, deal negotiations, and integration planning.
Executive Summary
- Material security risks (deal-breakers)
- Risk severity classification
- Financial impact estimates
- Valuation implications
- Integration complexity assessment
- Go/no-go recommendation (for buyers)
Technical Assessment Report
- Detailed security findings
- Vulnerability and exposure inventory
- Architecture and design issues
- Technical debt quantification
- Proof-of-concept evidence
- Comparison to industry standards
Remediation Roadmap
- Prioritized remediation plan
- Cost estimates for fixes
- Timeline for remediation
- Resource requirements
- Quick wins vs. long-term projects
- Risk acceptance options
Integration Plan (Buyers Only)
- Security integration strategy
- System consolidation approach
- Compliance harmonization plan
- Team integration recommendations
- Tool and vendor rationalization
Why security diligence pays for itself
Protect valuation
Negotiate price reductions or escrow holdbacks when material security issues surface. Even a 5% valuation adjustment on a $50M deal saves $2.5M, our fee is a rounding error.
Avoid costly delays
Discovering security issues after LOI causes deal delays, missed earnout milestones, or complete unraveling. Diligence before commitment prevents expensive surprises.
Prevent post-close disasters
A data breach in your first 90 days of ownership destroys value. Know what you're inheriting and plan remediation before it becomes your problem.
Get security diligence right
Whether you're evaluating an acquisition target or preparing your company for sale, we provide the independent security assessment you need to protect the deal.