How Vulnerable is Your M&A Process to Data Leaks?

Data leaks are of constant concern for M&A leaders – unwanted publicity or other possible deal-breaking blunders are undesirable – involved in buying and selling. Many commonly used M&A software tools to store and share sensitive information around deals, internally and externally, are highly vulnerable to leaks.

Could you unknowingly be exposing your company to these risks? This blog post will help you cultivate awareness, find better solutions to prevent unwanted access and tighten your M&A data security around pipeline and deals.

The likelihood of unintentionally exposing yourself to security risks is high

One study showed that close to half (40%) of all buyers discovered a data privacy or cybersecurity-related issue during post-acquisition integration activities. Yes, post-acquisition.

Data breaches are serious, especially when it involves customer information or critical intellectual property. Whether or not there has been a security breach, if you are the buyer, your job is to uncover this information before the deal is made.

What about vulnerabilities within your organization? During M&A due diligence, there are ways you can mitigate security risks on your end. The types of information that need to be safeguarded include issues, risks and financial information.

It’s important to prevent someone with malicious intent from getting enough information to figure out the company that may be acquired. We already know that the consequences of data leaks can be devastating – halted deals, lost leverage in negotiations, and regulatory crackdowns from financial service regulators – just to name a few.

Clearly, even your own vulnerabilities are not easy to uncover but they must be addressed proactively.

But how?

There is a solution to managing your M&A pipeline and deals that significantly lowers your data and security risks. We’ll discuss this shortly. First, we’ll talk about vulnerabilities.

Where are the security vulnerabilities in your current M&A software tools and/or platform?

There are cases where sharable links are accidentally shared outside of the organization, maybe because that individual no longer works with the company. In other cases, current tools do not allow flexible permissions with limited ability to pick and choose what that person has access to.

Someone could inadvertently have access to more information than is necessary. Is it worth putting yourself at risk?

If you are currently using an online office tool (Excel/Word Online or Google Docs/Sheets) or a simple project management tool to handle sensitive data, you may want to reconsider. These applications are not purpose-built for the data privacy requirements of merger and acquisition activity.

Every time you create a sharable link, you are putting yourself at risk. These tools also have inflexible permissions and passwords that can easily be hacked.

It’s not just the platform or tools that should be considered. Unintentional leaks can also be the result of careless behavior like announcing travel on social media, including deal info in room reservations, or casually mentioning details to family or friends.

What to look for in a secure M&A platform

Now that you are aware of existing vulnerabilities, the next step is to know the right questions to ask when looking to upgrade or replace your current M&A process or tools.

Consider asking these questions on the topic of security before making a decision:

  • ISO7001 Certification – Does the software or platform solution have a certified information security management system? What about the vendor’s entire organization?
  • Penetration Testing – Does the company allow customers to perform security audits and penetration testing of their own?
  • Flexible, User-Based Permissions – Does the software or platform have the ability to grant access rights only to certain projects or limited sections within a project?
  • Multi-Factor Authentication (MFA) and Single Sign-On (SSO) – Do they provide MFA and/or SSO? Which is that the best fit for your organization?

How Midaxo’s M&A platform significantly lowers your data and security risks

As you are doing your research, we’d like to share our solution here at Midaxo that is built upon decades of M&A experience. We understand the importance of data security and maintaining the confidentiality of information in an M&A context.

This key factor is incorporated into the way we have designed and built our entire platform. We invest in continuous security education and training for all of our employees and deeper training for our platform developers.

Midaxo is certified organization-wide for the international ISO 27001 information security standard. Our employees are required to pass background checks in accordance with the country-specific regulations and follow security protocols. Our asset inventory, equipment, and physical locations have been audited and approved. Midaxo has passed the ISO 27001 certifications four years in a row by KPMG.

A few additional noteworthy items around Midaxo’s M&A Platform security and data confidentiality:

  • Our security system has been evaluated 100+ times by customers without a single raised flag.
  • Penetration testing is done by hired third-party organizations. This testing is done at random times without our knowledge of when.
  • MFA and SSO are offered to meet your needs.
  • The platform allows for secure management of confidential information, such as insider trading information, and by default users cannot view any deals.

Our M&A Security Whitepaper provides more detail on the Midaxo Platform security features.

In your search for a better solution, be sure to ask your sales rep questions like those above to confirm whether their product will be helping or hindering when it comes to security.

Join the 300+ clients and partners who have already reaped the benefits of real-time collaboration and communication, systematic processes and efficiency gains with Midaxo’s M&A Platform.

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