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Analyzing risk when acquiring a company

When a credit union or other financial services company in Colorado or elsewhere merges with another entity, it may expose itself to any risks posed by that enterprise. It may be a good idea to have a cybersecurity professional analyze any risks that another business may pose if it is acquired. Such a review should focus on potential problems related to people and processes just as much as it does on issues related strictly to IT.

If a company is supposed to PCI compliant, it could incur significant fines for not following those guidelines. A combined organization may also have to spend money getting certified or deal with lost revenues from not being able to process transactions. A thorough study of a company's cybersecurity policies and capabilities may make it possible to gauge how expensive an acquisition may truly be.

A cybersecurity study should also account for any issues that may arise when connecting two networks together. If an acquired company's network is flawed or has been compromised, those problems could impact the acquiring company's network as well. Businesses should be aware of the potential fallout of a data security breach. This may result in additional monetary costs as well as damage to the brand, which could diminish how much it is worth on the open market.

An attorney may be helpful during the mergers and acquisitions process for a variety of reasons. First, a lawyer may be able to determine if the new entity will have the proper permits and certifications to operate legally. Second, it may be possible for an attorney to review a contract prior to his or her client signing it. Finally, legal counsel may be able to determine if the deal is structured in a manner that benefits all parties while adhering to relevant government regulations.

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