The Clock Is Running. So Are They.

In private equity, time and access are the two variables everything else depends on. Time governs the deal: every day of delay carries a cost, in capital, in confidence, in competitive position. Access enables the deal: opening systems, data rooms, financial records, and intellectual property to a temporary universe of advisors, bankers, lawyers, and consultants who need visibility to do their work.

Both are existential to a successful close.

They are also, as it turns out, precisely what your adversaries are optimizing for.

Threat actors read the news

This isn't a hypothetical. In 2021, the FBI issued a formal Private Industry Notification warning that ransomware actors are "very likely using significant financial events, such as mergers and acquisitions, to target and leverage victim companies." The mechanism is deliberate: threat actors conduct reconnaissance on companies they believe are in active deal negotiations, identifying non-public financial information they can weaponize as extortion leverage. Not just to extract a ransom, but to threaten exposure of deal-sensitive data that could collapse the transaction entirely.

The timing of these attacks is particularly calculated. Adversaries often compromise a target weeks or months before a deal closes, maintaining a low profile to avoid triggering the kind of alarm that would derail the purchase. Once the deal becomes public and systems begin to connect, they execute, with ransom demands calibrated not to the target company's revenue, but to the acquiring firm's balance sheet.

What it costs when they succeed

The data on deal impact is no longer anecdotal. A March 2026 study by FTI Consulting surveyed 278 senior executives across companies actively engaged in transactions and found that nearly 1 in 4 had experienced a cyber incident during or shortly after a deal.

Those are not tail-risk numbers. They are the lived experience of a material percentage of dealmakers operating right now.

The case record makes the mechanism concrete.

The lesson in both cases is not that these companies were uniquely vulnerable. The lesson is that an incident during a transaction does not stay contained to operations. It migrates into valuation models, MAC clause conversations, regulatory obligations, and the trust between buyer and seller that every deal depends on.

The access problem nobody talks about

Due diligence is, by design, one of the most permissive access environments a company will ever create.

In the weeks surrounding a deal, a company opens its systems: its financial records, customer data, intellectual property, and operational infrastructure, to a rotating cast of external parties. Investment bankers. Legal counsel. Accounting firms. Third-party technical advisors. Each requires access to do their work. Few are subject to the same security standards as the company's own employees. Almost none have that access formally de-provisioned once the deal closes or collapses.

For mid-market companies, the core of PE deal flow, the exposure is sharper. Research consistently shows that fewer than 40% of mid-market sellers use automated cloud security monitoring, and only about 65% have implemented basic multi-factor authentication. These are organizations managing a transaction that may represent the most significant financial event of their owners' lives, with security infrastructure that was not built to withstand targeted adversarial attention.

This is a transaction risk, not a technology risk

The framing matters. When cybersecurity sits in the technical workstream of diligence, reviewed by IT specialists, scored on a checklist, summarized in an appendix, it gets treated as an operational concern. Something to remediate post-close. A line item in the integration plan.

That framing is wrong, and it is expensive.

A cyber incident during an active deal does not pause operations and leave the transaction intact. It poisons the data room. It triggers disclosure obligations that reshape the legal posture of both parties. It hands leverage to the counterparty at the moment leverage matters most. It creates the conditions for MAC clause invocations, price renegotiations, and, in the worst cases, a walk.

The FTI research captures something important here: one in four CISOs say their organizations' leaders push to close deals quickly over conducting thorough cybersecurity due diligence. The pressure to move fast, which is entirely rational given deal economics, creates exactly the blind spot that adversaries exploit.

What deal teams should demand

This is not a call for slower deals or longer checklists. It is a call for earlier, sharper integration of cybersecurity into the deal process. Not as a compliance exercise, but as a transaction protection measure.

Three things that move the needle:

1. Threat-informed diligence before the data room opens

   Cybersecurity assessment should begin at the same time as financial diligence. Not after LOI, not as part of integration planning. By the time a data room is open, the access exposure has already begun. That assessment must now extend beyond traditional infrastructure and application security to include the target's AI footprint: the AI tools in use across the business, AI embedded in vendor and SaaS platforms, proprietary models or training data that represent IP value, and any AI-driven automation with privileged access to systems or data. An undisclosed AI implementation with access to sensitive customer data or financial systems is a liability, not a feature. Understanding the full scope of the target's security posture, including its AI risk, should inform deal structure from the start.

2. Access governance as a deal control

   Every party granted access to deal-sensitive systems should be inventoried, credentialed appropriately, and formally de-provisioned at the close of their involvement, whether the deal closes or not. This is basic identity hygiene that most deal processes treat as an afterthought.

3. Incident scenario planning before close

   Deal teams should define, in advance, what a material cyber incident during the transaction triggers: thresholds for MAC clause review, disclosure obligations, price adjustment mechanisms, and the communication protocols between parties. Not because incidents are expected, but because having the framework in place before one occurs is the difference between a managed outcome and a chaotic one.

The close

Private equity has always understood that the real risk in any deal is the risk you didn't see coming. Operational risk, management risk, market risk: these are priced in, planned for, and managed through structure.

Cyber risk during a live transaction is no longer an emerging concern. It is a documented, deliberate, and financially material threat that adversaries have operationalized. The question for deal teams is not whether to take it seriously. The question is whether to address it before the clock starts, or after it stops.