With the volume of M&A transactions surpassing record levels in 2021, many small- and medium-sized businesses (SMBs) have attracted interest from private equity firms or other motivated buyers. At the outset of a transaction, those potential buyers (often with the assistance of sophisticated advisers) will deliver well-developed due diligence request lists addressing myriad topics. Those topics will include an examination of the cybersecurity and privacy compliance posture of the target company, all part of evaluating possible transactional hurdles and liabilities associated with the target.

SMBs that are garnering interest from M&A partners (or actively seeking out such a partner) need to invest time and resources to ensure that their information technology and privacy practices are sufficient not only to satisfy the representations and warranties that these buyers will expect to receive as part of the contemplated transaction, but also to ensure a smooth transition of operations from the target SMB to the buyer.