According to a panel of cybersecurity experts, the level at which a company has its systems and data secured is a key factor in how much it is worth when a buyer comes knocking – “or whether a buyer will even bite in the first place.”
This is because cybersecurity is becoming ever more important when analyzing the level of risk that a buyer would take on during an acquisition. According to Howard Schmidt, a partner with consulting firm Ridge Schmidt Cyber LLC, during his time at Microsoft, “we did an acquisition one time — about $10 million. It brought tons of servers, a big IT infrastructure. When all was said and done, it cost more than $20 million to rebuild the systems that had been owned by criminals and hackers for at least two years. That’s a piece of M&A you need to consider.”
The panel stated that it is becoming far more common for buyers to call in cyber experts to audit a company’s systems before they make an offer. If not everything is in order the offer price may come down or they may pass up on the whole acquisition.
