KMK Law Corporate & Securities Blog

This post is a follow-up to January’s cybersecurity post discussing the cybersecurity considerations in performing due diligence in M&A transactions. The previous discussion can be found here. This post addresses two contractual provisions, the closing conditions and indemnification, which, if properly utilized, can protect acquiring companies from taking on too much cybersecurity risk in M&A transactions.

In today’s M&A transactions, cybersecurity deficiencies in a target company pose potentially significant financial and regulatory risks to the acquiring company. For this reason, new measures must be implemented in M&A transactions to protect both companies from today’s emerging cybersecurity epidemic.