How Cybersecurity Protects Valuation: Considerations For Private Equity In The Deal Lifecycle

Cybersecurity risk applies to businesses of all sizes and across all industries - it is a risk that cannot be ignored. In particular, cybersecurity risk can no longer be ignored in the deal lifecycle. Time and again, investors have seen value evaporate after an acquisition target or new portfolio company is breached by a threat actor. The fact of the matter is that the volume, complexity, and value of data that businesses process, store, and manage has risen dramatically while threat actors and their methods have become increasingly sophisticated. Today, cyber threats are harder to detect and protect against, and breaches or incidents are more harmful and costly than ever.

In my article last year, I highlighted that including Cybersecurity and Data Privacy in the due diligence process provides insights into the business under scrutiny and the potential need for investment as well as potential risk factors to be considered in the overall valuation. Recently, there