Cybersecurity Technical Due Diligence
Comprehensive security assessment for M&A transactions—identifying vulnerabilities, compliance gaps, and cyber risks
Cybersecurity risk is one of the most critical factors in M&A transactions. A single undiscovered breach or compliance gap can derail a deal or result in significant post-acquisition costs. Our cybersecurity due diligence experts evaluate security posture, compliance readiness, vulnerability exposure, and incident response capabilities—providing the insights you need to make informed decisions.
Cybersecurity Due Diligence Assessment Areas
Comprehensive evaluation of security controls, compliance, vulnerabilities, and organizational readiness.
Security Posture Assessment
Evaluation of overall security architecture and controls:
- Network security architecture and segmentation
- Identity and access management (IAM)
- Endpoint protection and detection
- Security monitoring and SIEM capabilities
- Encryption practices (at rest and in transit)
- Security governance and policies
- Third-party and vendor security management
Compliance & Regulatory
Assessment of regulatory compliance and certification status:
- SOC 2 Type I/II compliance status
- ISO 27001 certification readiness
- PCI DSS compliance (payment processing)
- HIPAA security requirements (healthcare)
- GDPR and privacy regulation compliance
- Industry-specific regulations (FINRA, NYDFS)
- Audit findings and remediation status
Vulnerability Assessment
Technical evaluation of security vulnerabilities and exposures:
- External attack surface analysis
- Vulnerability scan results and remediation
- Penetration testing history and findings
- Application security (OWASP Top 10)
- Patch management practices
- Known vulnerability tracking (CVE)
- Security technical debt assessment
Incident Response & Recovery
Assessment of breach detection and response capabilities:
- Incident response plan and procedures
- Security operations center (SOC) capabilities
- Breach detection and response times
- Historical incident analysis
- Business continuity and disaster recovery
- Backup and recovery testing
- Cyber insurance coverage review
Security Team & Culture
Evaluation of security organization and awareness:
- Security team structure and expertise
- CISO/security leadership assessment
- Security awareness training programs
- Phishing simulation results
- Security culture and employee practices
- Key person dependencies
- Managed security service providers (MSSPs)
Cloud & Application Security
Assessment of cloud infrastructure and application security:
- Cloud security configuration (AWS, Azure, GCP)
- Container and Kubernetes security
- API security and authentication
- Secure development lifecycle (SDLC)
- Code security scanning practices
- Secrets management
- DevSecOps maturity
Security Frameworks & Technologies We Evaluate
Deep expertise across security frameworks, tools, and compliance standards.
Compliance Frameworks
- ✓ SOC 2 Type I & Type II
- ✓ ISO 27001/27002
- ✓ PCI DSS
- ✓ HIPAA/HITECH
- ✓ NIST Cybersecurity Framework
Security Tools & Platforms
- ✓ SIEM (Splunk, Sentinel, QRadar)
- ✓ EDR/XDR (CrowdStrike, SentinelOne)
- ✓ Vulnerability Scanners (Qualys, Tenable)
- ✓ WAF & DDoS Protection
- ✓ PAM Solutions (CyberArk, BeyondTrust)
Cloud Security
- ✓ AWS Security Hub & GuardDuty
- ✓ Azure Security Center
- ✓ Google Cloud Security Command
- ✓ CSPM & CWPP Solutions
- ✓ Container Security (Aqua, Prisma)
Identity & Access
- ✓ SSO & MFA Solutions
- ✓ Identity Providers (Okta, Azure AD)
- ✓ Zero Trust Architecture
- ✓ Privileged Access Management
- ✓ Identity Governance
Application Security
- ✓ SAST/DAST Tools
- ✓ SCA (Software Composition Analysis)
- ✓ API Security Platforms
- ✓ Secrets Management (Vault, AWS Secrets)
- ✓ Code Security Scanning
Privacy & Data Protection
- ✓ GDPR Compliance
- ✓ CCPA/CPRA Requirements
- ✓ Data Loss Prevention (DLP)
- ✓ Data Classification
- ✓ Privacy Impact Assessments
Network Security
- ✓ Firewall & Network Segmentation
- ✓ VPN & Remote Access Security
- ✓ Intrusion Detection/Prevention (IDS/IPS)
- ✓ DNS Security & Filtering
- ✓ Network Access Control (NAC)
Threat Intelligence
- ✓ Threat Intelligence Platforms
- ✓ Dark Web Monitoring
- ✓ Brand Protection & Impersonation
- ✓ Attack Surface Management
- ✓ Security Ratings (BitSight, SecurityScorecard)
Why Cybersecurity Due Diligence Matters in M&A
Cyber risk is increasingly a deal-breaker. Undiscovered vulnerabilities can result in massive post-acquisition costs.
💰 Financial Impact
The average cost of a data breach exceeds $4.5M. Undisclosed breaches discovered post-acquisition can trigger indemnification claims, regulatory fines, and customer churn that destroy deal value.
⚖️ Regulatory Liability
Compliance gaps transfer with the acquisition. Non-compliance with SOC 2, HIPAA, PCI DSS, or GDPR can result in significant fines and mandatory remediation costs post-close.
🎯 Hidden Vulnerabilities
Technical security debt, unpatched systems, and exposed attack surfaces may not be visible in management presentations. Technical assessment reveals the true security posture.
🔗 Integration Risk
Connecting an insecure target to your network creates risk for the acquirer. Security architecture mismatches complicate integration and may require significant investment.
👥 Customer Trust
Breaches destroy customer trust and brand value. Security incidents post-acquisition can cause customer churn and damage to the acquirer's reputation.
📊 Valuation Impact
Security maturity directly impacts valuation. Strong security posture commands premium valuations; gaps result in purchase price adjustments or deal termination.
Common Cybersecurity Due Diligence Findings
Based on 75+ security assessments, here are recurring findings we identify.
🔓 Inadequate Access Controls
Excessive privileges, shared accounts, lack of MFA, poor offboarding processes. Former employees often retain access to critical systems.
Impact: Unauthorized access, insider threat risk
📋 Compliance Gaps
Incomplete SOC 2 controls, outdated policies, missing documentation. Audit findings not fully remediated or tracked.
Impact: Regulatory fines, customer contract issues
⚠️ Unpatched Systems
Critical vulnerabilities unpatched for months, legacy systems no longer supported, inconsistent patch management across environments.
Impact: Known exploitable vulnerabilities
🚨 Limited Detection
No SIEM or centralized logging, limited visibility into security events, no 24/7 monitoring. Breaches may go undetected for months.
Impact: Extended breach dwell time
📝 Poor Documentation
Outdated security policies, no incident response plan, missing network diagrams. Security knowledge concentrated in few individuals.
Impact: Slow incident response, knowledge loss
☁️ Cloud Misconfigurations
Overly permissive S3 buckets, exposed databases, missing encryption, inadequate cloud security controls. Shadow IT and unauthorized services.
Impact: Data exposure, compliance violations
Our Cybersecurity Assessment Process
Comprehensive security evaluation methodology that identifies risks and provides actionable insights.
Security Posture Discovery
Document security architecture, tools, team structure, and policies. Understand the current security landscape and identify key areas of focus.
Compliance & Governance Review
Assess compliance status (SOC 2, ISO, PCI, HIPAA), review audit reports, evaluate policy maturity, and identify certification gaps.
Technical Vulnerability Assessment
Review vulnerability scans, penetration test results, attack surface analysis. Evaluate patch management and security technical debt.
Incident History & Response Review
Analyze historical security incidents, evaluate response capabilities, review detection and monitoring infrastructure.
Cloud & Application Security
Assess cloud security configurations, application security practices, DevSecOps maturity, and secure development lifecycle.
Risk Quantification & Roadmap
Deliver detailed security risk assessment with quantified findings, remediation priorities, and post-acquisition security roadmap.
Need a Cybersecurity Technical Due Diligence Assessment?
Our cybersecurity experts will comprehensively evaluate your target's security posture, compliance status, vulnerabilities, and incident response capabilities. Identify the cyber risks that impact your M&A deal value.