Cyber Risk Can Affect M&A Valuation, Requires Focus in Due Diligence

Mergers and acquisitions in the US topped 12,000 last year and 2016 is already heating up, with a shareholder vote on Marriott International’s bid for Starwood Hotels expected this week, in a move that would create the world’s largest hotel chain. Experts say that in any M&A transaction, cyber risk must become a key focus in the due diligence process, but particularly in the hospitality industry.

Cyber criminals targeted at least five hotel chains in 2015 — Hilton, White Lodging Services, Starwood, Mandarin Oriental, and the Trump Collection. Recent reports also indicate that the Trump hotel chain has again been hacked. Hotel chains appeal to hackers as a steady business usually transacted with credit and debit cards and a high-volume blend of business and leisure travelers. Hotels mergers and acquisitions have increased as chains seek to consolidate and compete, but the security industry warns that acquiring companies need to be aware of the risks that come with the purchase.


Erin Ayers, Cyber risk can affect M&A valuation, requires focus in due diligence (April 15, 2016), available with subscription at Advisen Cyber Front Page News.