When cybersecurity becomes a negotiating clause
You've spent 20 years building your company. You're ready to sell, your accountant has prepared the numbers, your lawyer has drafted the preliminary agreements. Everything seems in order.
Then the buyer sends in their technical due diligence team. And that's when things go sideways.
We're seeing this more and more. Buyers, especially investment funds and strategic groups, now treat cybersecurity as a due diligence criterion on par with finance or legal. And since Bill 25 came into effect, this is even truer in Quebec: a buyer who inherits a non-compliant company also inherits the risk of penalties and reputational damage that comes with it.
If you're thinking about selling in the next 12 to 24 months, here's what you need to put in place now.
What buyers are really looking for (and what makes them walk away)
Due diligence teams don't just ask "do you have antivirus software?" They dig much deeper than that. Here's what consistently shows up in their evaluation checklists:
Incident history. Have you ever experienced a breach, a ransomware attack, a data leak? How was it handled? A well-documented, well-managed incident isn't necessarily a red flag. A hidden or poorly documented one, on the other hand, is the kind of thing that kills deals.
Regulatory compliance. For a Quebec SMB, that means Bill 25 first and foremost. Do you have an incident registry? A designated privacy officer? Privacy impact assessments for your recent projects? If you handle data from American or European clients, you'll also need to look at HIPAA or GDPR depending on your sector.
Technical architecture. This is often where things get complicated for manufacturing companies or those with physical facilities. The separation between your IT and OT networks, remote access management, updates to your legacy systems, all of it gets combed through.
Key-person dependency. If your entire IT security rests on a single employee who carries it all "in their head," that's a major risk for a buyer. What happens if that person leaves during or after the transition?
One thing we see often: owners who assume their external IT provider handles "all the security." In reality, many managed services contracts only cover basic infrastructure, not penetration testing, not compliance management, not employee training. This is a good time to clarify exactly what's covered and what isn't.
The roadmap: 6 to 18 months before going to market
Preparing your cyber posture for a sale doesn't happen over a weekend. Here's the logical order to follow.
Step 1 — The independent cybersecurity audit (6 to 12 months out)
Have a complete audit done by experts. The audit should cover your infrastructure, your policies, your access management and, where applicable, your OT environments.
Step 2 — The penetration test (pentest)
A recent pentest report, less than 12 months old, is often required directly in due diligence checklists. It shows that you've tested your defenses proactively, not just on paper. Fix critical vulnerabilities and keep written records of the fixes made, this documentation is what reassures the buyer.
Step 3 — Bringing Bill 25 compliance up to standard
If your privacy incident registry doesn't exist yet, now is the time. Document your personal data management processes, your agreements with subcontractors, and make sure your internal policies are current and signed by employees. A well-organized compliance file can literally shave weeks off a transaction's closing time.
Step 4 — Documentation and reducing key-person dependency
Document your procedures: access management, disaster recovery plan, incident response plan. If these only exist in your IT director's head, formalize them. A buyer wants to see that the company can function without depending on a single person.
Step 5 — The technical cleanup
Eliminate dormant accounts, former employees' still-active access, unsupported software. It's surprising how many companies still have active VPN accounts for people who left three years ago. This kind of detail, uncovered during due diligence, sends a bad signal about the overall rigor of IT management.
A concrete example: how it changes the conversation
Let's take two scenarios for a professional services company with 45 employees in Quebec City, valued at around $6 million.
Scenario A: The seller comes in with a cybersecurity audit dated 8 months prior, a pentest report with no open critical vulnerabilities, an up-to-date Bill 25 registry, and documented access policies. Technical due diligence takes two weeks. The buyer factors normal security costs into their financial model, with no surprises. The transaction closes at the asking price.
Scenario B: The seller has never had their systems audited. Due diligence reveals the absence of MFA on administrator accounts, no incident registry, and a file server accessible from outside without strong authentication. The buyer responds on three fronts: they demand a price reduction to cover estimated remediation costs, extend the process by three months to deepen their own legal checks, and impose an indemnification clause covering any security incident occurring within 24 months of closing.
The difference between the two scenarios isn't the quality of the company itself. It's the preparation.
Take action before the buyer does it for you
The truth is, no matter how good your company is, a poorly prepared cyber file will slow down your transaction, chip away at your sale price, or worse, scare off a serious buyer. Companies that get ahead of it, ideally a year before going to market, arrive at the negotiating table in a position of strength rather than on the defensive.
At AIKI Secure, we help Quebec SMB owners with this preparation: independent audits, penetration testing, Bill 25 compliance, and complete documentation of your security posture. We know the questions buyers will ask, because we see them come up regularly in our engagements.
If a sale is in your plans for the next 12 to 24 months, contact us now for a preliminary audit. Better to find the gaps yourself, in your own office, than to have a buyer find them during due diligence, calculator in hand.
