Identifying and Protecting Sensitive Data During Mergers & Acquisitions

Sep 19, 2023
February 20, 2024
Jonathan Sharabi
Identifying and Protecting Sensitive Data During Mergers & Acquisitions

Mergers and acquisitions (M&A) come with high risks, including the very real risk of exposure and compromise from merging systems and workflows that manage sensitive data. Merging architectures is a daunting task in any context, but when two separate entities undergo the process of bringing their IT systems and processes, including data inventories, data risk assessments, and security operations programs, the transition period can increase the exposure to data breaches. 

That’s why acquiring companies perform data inventories as part of their diligence, looking at the risks associated with the data. Then post transaction, they work diligently to ensure that target companies meet the rigor of their corporate standards. By identifying and protecting sensitive data during a M&A transaction, companies can prevent the target company from introducing new data security risks.

The Data Security Risks of M&A Activities

When companies consider an M&A transaction, the target company can introduce a number of data security risks. These risks include different corporate security standards, a fragmented data landscape, additional data protection and privacy regulations, and inadequate access controls.

The security team at the acquiring company might not have a holistic understanding of the data at the portfolio company. The security team’s objective is to understand the risk that the portfolio company brings in the event of a data breach, which requires an inventory of the datastores and the sensitive data they contain. The goal for the security team is to create a comprehensive data foundation to ensure that the portfolio company meets the corporate security standards established by the acquiring company. 

After an acquisition, there’s data across a disparate set of cloud environments, applications, and databases. It can be hard for the security team to identify and protect all of this information without an effective solution that can achieve visibility of data across the growing enterprise. The security team needs a modem data security solution that can accurately identify sensitive information, assess exposures, and audit security controls.

Merging companies may operate in different jurisdictions, each with their own set of regulatory obligations. This means there may be different data handling requirements for GDPR, HIPAA, or industry-specific regulations. The security team will need to ensure compliance with additional regulations by implementing safeguards, conducting audits, establishing a data security framework, and more.

Portfolio companies often possess valuable intellectual property, trade secrets, or proprietary information that the acquiring company wants to keep secure. Inadequate access controls and data sharing processes can inadvertently leak this information. The security team will need to implement strong access controls, data encryption, and other security measures to minimize the risk of a data leak or breach.

How Cyera Can Reduce The Data Security Risks of M&A Activities

Here’s how Cyera’s data security platform can mitigate the data security risks of M&A activities.

1. Inventory data across consolidated firms 

Cyera automatically discovers datastores across IaaS, PaaS, and SaaS environments, and determines whether it contains sensitive information. Sensitive data could be personally identifiable information (PII), financial records, intellectual property, trade secrets, customer data, and any other proprietary or confidential information.

Along with identifying datastores that contain sensitive data — in any file, table or column in your environment — Cyera continuously scans your environments to detect changes to your data landscape. The platform automatically learns, classifies and contextualizes large volumes of data to create an inventory. This up-to-date data inventory helps security teams gain a holistic understanding of an organization’s consolidated data landscape, including the data owned by newly acquired or merged companies.

2. Assess data risks of newly acquired company

Cyera can evaluate the risks associated with sensitive data based on deep contextual information and validate the controls around the data. This assessment considers the identifiability of data, configurations of the environment, level of access, and more. Security teams can use this information to implement consistent access controls across consolidated firms.

In addition, Cyera’s unified policy engine evaluates data security posture challenges based on established frameworks including GDPR, CCPA, NIST, CIS, and more. This helps security teams reduce the data exposure of newly acquired companies that might have different regulatory requirements.

3. Remediate and remove the risks

Cyera supports prevention, detection and response, and streamlines operations by making it easier to understand data risks and the appropriate action to take. The platform highlights security exposures, misconfigurations, or misuse to stop data breaches as the actions are taking place.

By continuously monitoring all data-related events, your central security team can address events that may lead to a data breach. They’ll also have an integrated workflow to both understand and quickly remediate threats.

4. Implement consistent data security controls across merging firms 

Cyera can help you ensure regulated data is properly governed by data loss prevention (DLP), data access governance, and data minimization policies. The platform also triggers prioritized alerts of policy violations related to datastore misconfigurations, permissive access, and noncompliance. This helps security teams implement consistent data security controls no matter where the data is stored.

The Cyera data security platform also audits encryption controls to determine whether data is encrypted, tokenized, hashed, or in plaintext. Security teams can use these insights to ensure sensitive information is adequately protected during and after an M&A transaction.

Modern Data Security with Cyera

There are a number of data security risks associated with M&A transactions, but they can be mitigated with a modern data security solution. Cyera provides intelligent discovery and classification, contextual risk assessments, and automated remediation workflows to improve your data security posture across multiple companies.

Cyera takes a data-centric approach to security, assessing the exposure to your data at rest and in use and applying multiple layers of defense. Because Cyera applies deep data context holistically across your data landscape, we are the only solution that can empower security teams to know where their data is, what exposes it to risk, and take immediate action to remediate exposures and assure compliance without disrupting the business. 

Schedule a demo today to see how Cyera can help you protect sensitive data during mergers and acquisitions.