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IT risks in mergers & acquisitions: why due diligence is critical
- Mergers and acquisitions (M&A) bring growth opportunities but require thorough IT due diligence alongside financial and legal assessments to avoid risks.
- IT due diligence involves evaluating tech infrastructure, cyber risks, software compliance, and operational capabilities of the target company.
- Key IT risks include cyber security vulnerabilities, legacy systems, compliance issues, software licensing risks, and IT integration challenges.
- Cyber due diligence is crucial to uncovering security threats, data breaches, and regulatory non-compliance before finalizing M&A deals.
- Legacy systems may result in maintenance costs, compatibility issues, and security threats if not addressed during due diligence.
- Non-compliance with data protection regulations can lead to legal and financial liabilities for acquiring companies post-acquisition.
- Intellectual property and software licensing risks can result in infringement issues, breaches of agreements, and unplanned costs without proper diligence.
- Successful IT integration post-M&A requires detailed planning to avoid disruptions, loss of productivity, and revenue impacts.
- Proactive IT due diligence enhances risk management, helps in cost planning, strengthens negotiation positions, and ensures seamless IT integration.
- Neuways offers IT assessment solutions for cybersecurity, compliance, and integration planning to facilitate smooth M&A transitions and mitigate IT risks.
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