How M&A Activity Can Open the Door to Cyber Threats

Preparation for acquisition and/or valuation: Organizations are vulnerable to threats right from the start. Job listings for positions that require corporate development or other M&A-related experience, or activities like another round of funding or other initiatives to boost the company in the eyes of deal makers, can be clues that M&A activity is in the offing. Astute financial analysts may draw their own conclusions based on activity and start to comment. Meanwhile, sophisticated threat actors who have picked up the scent may target the executives typically involved with such activity with spear-phishing campaigns, man-in-the-middle malware attacks, or simply through unsecured wireless Internet connections. Not only is the deal exposed earlier than intended, possibly leading to a host of complications, but information gained can be highly valuable to those with nefarious motivations.

Marketing shifts: As companies move through the process, they may alter their marketing behaviors. To the public, these marketing activities may appear innocuous. But to a trained eye, an identifiable pattern and opportunity can emerge. A company slowing its cycle of product announcements or showing strength in profitability while quietly reducing staff can raise suspicion, for example. Employees who have lost their jobs may start to leak information and further tip off cyber criminals, who may launch spear-phishing campaigns to confirm their suspicions and acquire valuable data.

Due diligence: This stage of the process can provide executives with opportunities to gain significant insights to help reduce risk, but it can also provide cyber criminals with significant opportunities to steal data. The acquiring company has the chance to review the security and integrity of the systems of the company it’s merging with and understand how to mitigate risk before finalizing the deal. At the same time, both companies may experience an increase in …

… spear-phishing attempts as attackers strive to take advantage of a surge in data that exchanges hands during due diligence.

Negotiations, signing and announcements: Organizations that lack social media policies, mobile-device management and endpoint protection may find data leaked inadvertently as the end of the M&A process approaches. While all employees should be vigilant at this stage, executives are particularly susceptible to attack. Poorly secured personal devices and the use of public Wi-Fi to review documents while on the road or in meetings provide bad actors with ample opportunity to steal high-value data. Once the announcement is made, the doors will open even wider, and less sophisticated attackers will also try to profit or cause disruptions.

Waiting period and final merge: The main risk at this stage is from employees who fear a job loss or change and may leak or steal IP or other data. If an attacker has established a foothold in a merging network, this is also an optimal time to monitor communications and patiently wait for deeper access or utilize that information for social engineering.