Cybersecurity in Staffing M&A Part 3 – Post-Acquisition Cybersecurity
Post-acquisition cybersecurity integration is critical to preserving deal value in staffing M&A.
In Part 1 of this series, we looked at the cybersecurity risks that often go unnoticed before a staffing M&A deal begins.
In Part 2, we explored how hidden vulnerabilities uncovered during due diligence can derail a transaction or lead to painful surprises post-close.
Now in Part 3, we turn our focus to what happens after the deal is signed. Because once the ink dries, the real work begins, and for many buyers, post-acquisition cybersecurity integration is where the biggest risks and blind spots still live.
After the deal is closed, the hard work doesn’t stop. In fact, post-acquisition cybersecurity integration can be one of the most challenging, and critical parts of an M&A transaction. Ensuring that security measures are harmonized, and operational risks are mitigated during the integration phase can make or break the success of a merger.
I sat down again with cybersecurity expert Mike Glover and Charter’s Krisann McDonnell to talk about the people, systems, and processes that must align to keep a deal from turning into a security mess.
Brian Kennedy: Mike, Krisann, now that a deal is closed, what are the key cybersecurity integration challenges companies face?
Mike Glover: “The first major challenge is aligning IT systems. Even if both companies had solid security practices before the deal, merging different systems can expose vulnerabilities. Whether it’s integrating payroll systems, HR software, or cloud-based services, you’re looking at a lot of moving parts. If the integration isn’t done carefully, you can inadvertently create new gaps in security.”
Brian: So, the merging of systems itself can create new risks?
Mike: “Absolutely. Even if the intention is to improve overall security, the process of integration can sometimes expose weaknesses. For example, if one company is using an outdated system that isn’t compatible with the buyer’s newer systems, that could leave a backdoor open for cyberattacks. The IT teams need to carefully vet all systems before integration to ensure that the security posture remains strong.”
Krisann McDonnell: “Adding to that, another challenge is ensuring a unified security culture. Cybersecurity isn’t just about technology; it’s about people. You have different teams, with different policies and practices. For the integration to be successful, you need to align employees on the importance of cybersecurity, the protocols to follow, and the tools to use. If there’s inconsistency, it can lead to weak points that attackers might exploit.”
Brian: That’s a good point, Krisann. How do you effectively manage this cultural shift and ensure that employees from both companies are on the same page when it comes to cybersecurity?
Krisann: “It’s all about education and communication. The first thing you need to do is communicate the importance of cybersecurity to all employees early on. Staff training should be one of the first initiatives after the acquisition. Everyone needs to be on the same page in terms of understanding the firm’s new security protocols and how to recognize potential threats, like phishing attempts or social engineering tactics.”
Mike: “One of the most critical things during this phase is to ensure employee access control is locked down properly. The merger is the time when access rights should be reassessed across the entire organization. You need to identify who has access to sensitive data and systems and whether that access is still justified. If former employees or contractors still have access, it could be a serious security risk.”
Brian: That’s a great point. Now, what about monitoring? After the integration, how can staffing firms ensure that their security measures are holding up?
Mike: “Post-integration, you need a strong monitoring system in place to ensure that security risks don’t slip through the cracks. It’s critical to have continuous monitoring tools that alert your IT team to any suspicious activity. This way, you can act quickly before a potential attack becomes a full-scale breach.”
Krisann: “Continuous monitoring is non-negotiable. During the integration process, there’s a high level of risk, as cybercriminals often see mergers and acquisitions as a prime time to strike. Attackers target the weak points during the chaos of an integration. Monitoring tools help identify these risks in real-time, so that you can act fast.”
Brian: What happens if a cybersecurity incident occurs after the deal closes? How should the buyer respond?
Krisann: “If an incident occurs post-acquisition, it’s critical to have an incident response plan already in place. This plan should outline the roles and responsibilities of the IT team, communication protocols, and the steps to contain the breach. Having a tested, clear response plan can make all the difference in minimizing the damage from an attack.”
Mike: “Right. An incident response plan ensures that everyone knows what to do and can act quickly. But even before an incident occurs, you should be testing the security systems regularly and conducting mock incident response drills. This keeps the team sharp and ready if something does go wrong.”
Brian: So, it sounds like cybersecurity post-acquisition is not just about fixing immediate problems—it’s about being proactive to ensure a smooth transition.
Mike: “Exactly. It’s about making sure that security is integrated into every part of the new business. It’s not just the IT systems but also the people and processes. You need to assess and adjust to ensure that vulnerabilities aren’t created during the transition phase. The goal is to keep the organization secure and ensure that the buyer’s investment is protected long-term.”
Krisann: “And that’s why cybersecurity should be part of the post-merger strategy from the very beginning. It’s about setting up your systems for success and preventing a situation where you’re scrambling to fix issues after they arise. If you do this correctly, the integration can be smooth, and the organization can operate securely in its new form.”
Brian: For staffing firms looking at an M&A deal, what steps should they take to ensure a smooth cybersecurity integration post-acquisition?
Mike: “The first step is to conduct a thorough assessment before the deal closes. This means auditing all systems, reviewing access controls, and checking for vulnerabilities. Then, as the integration progresses, it’s important to keep communication open between both IT teams and the leadership teams to ensure the process remains smooth. Make cybersecurity a key part of the merger’s success.”
Krisann: “And keep educating your staff. Post-acquisition is a time of change, and staff may not be familiar with the new protocols. So, ongoing training, regular communications, and a clear incident response plan are vital. The more proactive you are, the less likely you’ll face issues down the road.”
Brian: Final thoughts on post-acquisition cybersecurity integration?
Mike: “It’s all about planning. Start with a comprehensive audit, align your teams, and ensure you have strong monitoring in place. Don’t let security be an afterthought after the acquisition. Make it a key part of the integration strategy from day one.”
Krisann: “Post-acquisition cybersecurity isn’t a one-time fix—it’s an ongoing process. By taking the right steps early on, you can prevent problems later and make sure the newly merged entity is secure, compliant, and ready to thrive.”
As mentioned, post-acquisition cybersecurity integration is critical to preserving deal value in staffing M&A.
Take Action Now.
If you’re considering selling your staffing firm, don’t let cybersecurity be the reason you lose value or delay your deal. The risks you overlook today could be the very reason your deal falls apart tomorrow.
As someone who specializes in selling staffing companies, I can tell you that the firms that address cybersecurity issues upfront are the ones more likely to get top dollar. It’s a marketable characteristic of your enterprise. If you want to make your business as attractive as possible to buyers, it’s crucial to address any cybersecurity vulnerabilities now.
Charter can make that process easier. They offer confidential cybersecurity assessments that help firms identify weaknesses, improve their digital hygiene, and ensure they’re ready for a successful transaction.
No cost. No pressure. Just real insights.
Schedule a complimentary, confidential consultation with Charter today: [kmcdonnell@charter.ca]
You can also ask us your M&A questions: brian@racohenconsulting.com and be sure to check our Resources Library out here: https://racohenconsulting.com/library
Your business value depends on it.
In the next article, we’ll look at the proactive steps staffing firms can take before entering the M&A market to strengthen their cybersecurity and protect their valuation.
