Cyber as the new value driver

This week’s blog comes from Faizul Ali and Paul Harragan

We were recently interviewed by CityAM around how cyber security is increasingly playing a significant part in the ongoing value of an organisation and M&A activity. Whereby market capitalisation, EBITDA, cashflow and IP are some of the traditional metrics used to measure the value of a company, nowadays, there is a new addition, a company’s cyber security.

There are a number of ways that cyber security acts a value driver to enhance a company’s credibility and worth.

The level of malicious online activity targeting a particular company is often heightened during a period of M&A activity as communication and information shared between a firm’s component parts, and external advisors, increases.

The consequences of a breach during this time can be severe and if not discovered in time, can result in a firm paying significant amounts to buy a compromised business.

The same rules apply to funds wishing to sell off assets, as a company deemed to have very robust cyber defences will command a premium.

What has become clear is the apparent link between the value of a company and the robustness of its cyber security.

Organisations want to buy a business in good health. They do not want ambiguity when spending billions of pounds acquiring a company. It is all about certainty. As such, cyber security deal diligence can be crucial in monitoring the threat landscape to protect company and portfolio investments.

To view the full article in CityAM, please click here.