Protect Data in Merger and Acquisition Deals

While M&A deals can add value to the company’s assets, they can also expose it risk. Companies that fail to take care in M&A transactions to protect information could be subject to costly fines and lose trust in digital media. A well-planned, properly implemented privacy due diligence can help reduce these risks.

Therefore, many webdataroomcenter.net/an-efficient-board-meeting-agenda-template-for-nonprofits M&As include a lot of sensitive information that could be impacted by regulatory issues and legal issues. This is particularly true in the case of M&As which involve highly-regulated industries, such as healthcare and finance. In these cases, parties might be required to conduct a separate examination of compliance with regulations during the due diligence process.

Whether the data of the target is subject to sectoral regulations such as the Gramm-Leach-Bliley Act or the Health Insurance Portability and Accountability Act or general consumer privacy laws like the California Consumer Privacy Act, a potential buyer must understand the level of compliance and risk in the deal prior to closing. It is essential to speak with the targets’ personnel who are accountable for data security and privacy to get a complete picture of their status, including a look at any policies or procedures that could pose a problem in an M&A scenario.

In this regard, it’s essential to include forward-looking covenants in the sale contract that will require sellers to enhance their data protection practices pre-closing. This will not only ensure compliance with applicable laws and regulations, but it’s also an excellent way to minimize post-closing liabilities and mitigate the impact of M&A activities on future data breaches.