TH E STA N D -UP //
On Trend
C
ybersecurity presents a constantly evolving challenge to dealmakers looking to invest and exit successfully. Ransomware and data breaches can cause deal value to evaporate faster than yesterday’s social media post. Philip Lewis, a partner at Fulcrum Equity Partners, and Justin Daniels, corporate M&A and cyber counsel for Baker Donelson, recently discussed managing cyber risk on the “She Said Privacy/He Said Security” podcast, which Justin hosts with his wife, Jodi Daniels. Below is an edited version of the conversation.
JUSTIN DANIELS: Philip, how has cybersecurity and privacy changed how you evaluate deal risk?
PHILIP LEWIS: I think it’s a constantly evolving topic. Fifteen years ago, I don’t think there was a lot of thought put into it. At this point, it is at the forefront of your mind in any transaction you’re looking at. Now on every deal, you are asking questions like: What does your perimeter security look like? What is your mobile device management? Do you use multifactor authentication? I think the level of diligence you have to do and the number of questions you ask on the front end to make sure that you don’t end up in a precarious situation has really evolved, especially over the last two years.
Securing Your Merger: Managing Cyber Deal Risk
PHILIP LEWIS
Partner, Fulcrum Equity Partners
10
middlemarketgrowth.org
JUSTIN DANIELS
Corporate M&A and Cyber Counsel, Baker Donelson
JD: As you go through the diligence, how can cybersecurity impact the deal?
PL: I’d say the biggest issue could be delaying the deal. Although I have not seen it kill a deal yet, I have seen a requirement to make necessary security investments on Day One
Illustration by Joey Guidone
