Can cybersecurity breaches threaten deal valuations?

Can cybersecurity breaches threaten deal valuations?

1 Expert Answer

Mark Seifert

Partner, Washington, D.C.,  Brunswick Group

Investors sharply reduce their post-close valuations of companies that have completed acquisitions when data breaches are revealed, according to a new survey of investors and analysts by Brunswick Group, a global critical issues advisory firm.

Brunswick’s third annual Data Valuation Survey also found that investors raise their post-deal valuations for companies that have demonstrated preparation for cybersecurity issues.

  • Brunswick Group investor survey finds post-close M&A valuations cut by data breaches
  • Most investors say they would lower post-close valuation if either party had a breach
  • Half of surveyed investors would award higher valuation for companies working with security firms to reduce potential cyber risks

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