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Cyber risk is now one of the most urgent and financially impactful issues facing Private Equity firms. With portfolio companies increasingly targeted by ransomware, phishing, and supply-chain attacks, cybersecurity has shifted from an IT concern to a board-level priority. These digital moats now play a factor in each firm’s valuation, deal execution, and investor confidence.
Yet most portfolio companies, especially in the middle market, lack the internal resources to maintain modern security standards across networks, applications, and data environments. For PE operating teams, this creates inconsistent risk exposure and significant operational drag.
According to the 2025 IBM Cost of a Data Breach Report, the average breach now costs $4.45 million, the highest in the report’s 19-year history, with mid-market companies among the fastest-growing targets. Meanwhile, EY’s latest Global Private Equity Pulse Survey shows that cybersecurity has entered the top three concerns of PE leaders for three consecutive years.
Partnering with a Managed Service Provider (MSP) that leads with cybersecurity and data protection offers an immediate, scalable, and cost-efficient way to create a defensible security baseline for each investment.
Keeping our perspective on the M&A process, I’ll highlight the five most important reasons for selecting a cyber-focused IT partner, and additional points of consideration for each:
1. Standardizing Cybersecurity Posture Across the Portfolio
One of the biggest challenges PE firms face post-acquisition is aligning cybersecurity measures. Each company arrives with different tools, policies, and maturity levels that create blind spots across the firm’s ecosystem.
A cybersecurity-first MSP delivers:
- Uniform security policies
- Standardized endpoint protection
- Centralized monitoring and alerting
- Consistent compliance reporting
- Documented playbooks and incident response plans
This standardization not only reduces risk but also lowers costs through consolidation, eliminating duplicate tools and unmanaged devices.
The 2024 Deloitte Future of Cyber Survey found that organizations adopting standardized cybersecurity frameworks reduced incident frequency by up to 30% within the first year.
2. Rapid Detection and Response to Threats
Because threat actors operate around the clock to disrupt mid-market companies, the defenses of your Portfolio need to do the same.
A security-led MSP provides 24/7 Security Operations Center (SOC) services, threat detection, and continuous monitoring that most mid-market companies cannot staff internally.
This allows for:
- Real-time detection of suspicious behavior
- Containment of threats before spread
- Reduced dwell time (the time attackers go unnoticed)
- Faster remediation and recovery
The IBM Data Breach Report mentioned above notes that organizations with managed detection and response capabilities reduce breach lifecycles by over 80 days on average – saving more than $1.7M per incident.
PE firms are taking note of the costs of such incidents and now leverage threat detection as a true protector of portfolio value as they near exit.
3. Enhancing Compliance and Reducing Regulatory Exposure
Portfolio companies often face diverse regulatory environments – HIPAA, PCI-DSS, NIST, SOC 2, GDPR – and the complexity multiplies with each new acquisition or industry vertical.
A cybersecurity-led MSP ensures portfolio companies meet and maintain compliance through:
- Automated compliance monitoring
- Policy management
- Audit documentation
- Ongoing gap assessments
- Staff training and phishing simulation
According to a 2024 Thomson Reuters Regulatory Intelligence Report, compliance failure costs have risen over 45% in five years due to increased fines and mandatory disclosure requirements.
Having an MSP partner in place from entry through exit sharply reduces that exposure.
4. Strengthening IT Due Diligence and Reducing Deal Risk
Cyber risk is now a critical part of deal valuation and investment committee approval. Yet many target companies – especially founder-led businesses – lag significantly in cybersecurity maturity.
An MSP that specializes in cybersecurity enhances the deal process by providing:
- Pre-acquisition IT and security assessments
- Inventory of vulnerabilities and legacy systems
- Estimated remediation costs
- Risk scoring aligned to industry standards
- Insights for negotiation and post-close planning
In KPMG’s 2025 M&A Deal Market Study, 54% of deal leaders cited cybersecurity issues uncovered during diligence as a reason they reduced valuation, and 27% said it caused them to walk away from a deal entirely.
It’s been echoed for years that “Time kills all deals,” but having a strong MSP partner gives PE firms the confidence to make faster, clearer, and safer investment decisions.
5. Improving Exit Readiness Through Documented and Mature Cyber Programs
Buyers today place increased scrutiny on cybersecurity posture during exit, often requesting detailed documentation of tools, policies, monitoring, and historical incident reports.
Portfolio companies that demonstrate mature security programs:
- Achieve smoother due diligence
- Inspire higher buyer confidence
- Face fewer contractual demands (e.g., reps & warranties)
- Command higher valuations
According to PitchBook’s PE Value Creation Report from Q3 2025, businesses that show “strong cybersecurity maturity” achieve 8–12% higher exit multiples on average across all industries – a figure that aligns with dealmaker feedback in the KPMG study.
An IT partner that is present from acquisition through exit ensures that cybersecurity readiness is a built-in advantage from day one.
Key Takeaway: Cybersecurity Is Now a Value-Creation Imperative
For Private Equity firms, cybersecurity is a strategic necessity that impacts valuation, integration, compliance, and just as importantly – their reputation within the market.
By partnering with a cybersecurity-first Managed Service Provider like Access One, PE firms gain:
- Portfolio-wide standardization
- Continuous threat protection
- Reduced regulatory exposure
- Stronger due diligence insights
- Enhanced exit readiness
In a landscape where cyber risk is accelerating and attack vectors are expanding, a proactive MSP partnership is one of the most cost-effective ways to safeguard both operational and financial outcomes.
Cybersecurity doesn’t just protect value – market participants themselves tell us it is an essential value creation tool.
About the Author
John Kochvar, National Account Manager, leads our Private Equity team at Access One, with nearly 20 years’ experience partnering with PE-backed mid-market organizations across all industries, from manufacturing and business services to healthcare and information technology. He has a deep understanding of the modern Private Equity operating model and the role in which IT plays as a value creation tool at each stage of the investment cycle.
