Our Approach
A Sponsor-Aligned Framework for Quantifying and Managing Cyber Risk Across the M&A Lifecycle
Built specifically for financial sponsors, the BSC 4D℠ M&A Cyber Framework has been refined through years of transaction experience – across industries, deal types, and investment strategies. Our repeatable and scalable system gives sponsors a way to quantify risk, prioritize oversight, and protect value from acquisition through exit.
We’ve applied this model to transactions across healthcare, manufacturing, tech, and services – each time adapting it to the firm’s deal cadence, risk tolerance, and portfolio composition.
Structured, but not rigid. Repeatable, but always tailored.
Overview
Before we screen a single target, we establish a clear baseline across your existing portfolio. This assessment delivers portfolio-wide visibility into cyber maturity and financial exposure — giving you a consistent benchmark for evaluating risk, prioritizing oversight, and informing board-level decisions. It’s the foundation for scalable, sponsor-aligned cyber diligence and long-term value protection.
Details
We treat the Portfolio Assessment as the gateway to partnership and a requirement for engaging our firm. However, we credit the full cost back against future diligence engagements, effectively bringing the net cost to zero over the lifetime of our partnership.
Outcomes
Sponsor-Wide Maturity Dashboard to compare holdings and flag outliers
FAIR-Based risk quantification across all holdings to prioritize attention and investment
Deal Team Benchmarks to evaluate future targets in context
Board and LP Briefs to support oversight and reporting requirements
Overview
Cyber diligence only works when it’s fast, relevant, and grounded in financial impact. Our Cyber Screening process zeroes in on material risks – not technical noise – and aligns findings to deal value, structure, and insurability. If there's no red flag, you move forward confidently. If there is, we escalate to more in-depth analysis, but only where necessary.
Details
Our Cyber Screening model is built for speed, relevance, and repeatability. We offer a simple, fixed-fee structure that enables early engagement without slowing deal momentum. This allows sponsors to identify and size cyber risk before final diligence stages – when it’s still actionable.
Cyber Screening engagements draw against the initial Portfolio Risk Benchmarking investment, enabling sponsors to engage earlier in the deal process without incremental cost. This model reduces last-minute fire drills, promotes consistency across deals, and reflects our commitment to partnership – not one-off transactions.
Outcomes
Executive Summary with implications for valuation, deal structure, and post-close priorities
Cyber Risk Scorecard benchmarking the target’s maturity against your portfolio baseline
FAIR-Based Risk Quantification to support materiality decisions and inform deal protections
Strategic Readout and ongoing deal support, including supporting deal counsel and R&W underwriters
Overview
After close, most sponsors lose visibility into whether cyber risks are truly reduced or simply deferred. Our oversight model gives sponsors a structured, portfolio-wide view of risk posture and progress over time. By combining remediation tracking with proactive threat monitoring, we enable sponsors to maintain strategic oversight, respond to emerging risks early, and ensure cyber maturity continues to evolve beyond the deal.
Details
Our oversight is mapped to the baseline established during Portfolio Risk Benchmarking and extends beyond diligence findings. The model is designed for continuity – giving sponsors portfolio-wide visibility through a predictable structure that scales with their investment activity and reduces the need for fragmented, one-off assessments. This helps investors maintain confidence in their holdings, demonstrate effective and consistent oversight, and prepare for future exits with clean narratives.
Outcomes
Quarterly Portfolio Scorecards to track maturity, risk posture, and organizational progress
Continuous external threat monitoring including dark web forums, brand abuse, executive impersonation, and other potential breach signals
Sponsor-Level Escalation Briefs for identified threats requiring executive attention
Year-over-Year Trend Reporting to measure progress and support board-level governance
Overview
As sponsors prepare to exit, unresolved cyber issues can become friction points – delaying diligence, raising buyer concerns, or weakening the valuation narrative. Our divestiture preparation process helps sponsors validate cyber maturity, resolve loose ends, and proactively frame the risk story in a way that builds confidence with buyers, insurers, and legal counsel. It’s not just about readiness – it’s about control over the narrative.
Details
We align exit preparation to the sponsor’s timeline, working behind the scenes to validate that prior risks have been addressed and current controls meet buyer expectations. Our work includes formal attestation, buyer Q&A support, and shaping a credible cyber narrative — all structured to reduce diligence friction without requiring a separate workstream. For clients that have been actively engaged in our 4D℠ M&A Cyber Framework, this process is already built into our partnership and typically requires no additional lift at the end of the hold period.
Outcomes
Exit-Readiness Brief highlighting the company’s current posture and remediation progress
Cyber Maturity Attestation and supporting documentation for buyer diligence
Strategic Risk Narrative for investor decks, CIMs, or buyer-facing materials
Deal support for legal, insurance, and buyer teams evaluating cyber-related disclosures and risks
case studies
The 4D Framework at Work
Every deal is different, but the stakes are always high. These case studies show how we apply our sponsor-aligned 4D framework to uncover material risks, provide clarity, and protect value across the transaction lifecycle.
From fast-moving carve-outs to sector-specific rollups, each example highlights real findings, strategic insight, and tangible outcomes — delivered at the speed and precision M&A demands.
The Challenge
The sponsor was scaling through a roll-up strategy: multiple back-to-back acquisitions that would all be under a shared operating model. But that efficiency came with a tradeoff. Minimal time for deep diligence. Cybersecurity reviews, in particular, threatened to slow execution and introduce friction. With competing bids always a possibility, the firm needed a way to assess cyber risk that aligned with how they buy: fast, focused, and repeatable.
BSC Involvement
We conducted our cyber screening in 5-days, focused on finding and quantifying material risk instead of cataloging every cybersecurity finding. We created an investor-focused report mapping findings to financial exposure, deal terms, and recommended actions.
Key Finding
The assessment found vulnerabilities in manufacturing systems that were exposed to the internet. These findings were material to the deal due to the historic use of the vulnerabilities in ransomware attacks. If exploited, all production would be stopped. That translated into a projected $3.7M exposure, representing 19% of adjusted EBITDA.
The Outcome
The sponsor adjusted terms to include a $1.5M holdback and secured pre-close remediation for the identified vulnerabilities without delaying the transaction. Cyber insurance limits were revised to account for the $3.7M modeled loss, protecting against the known downside.
Takeaway
Cyber diligence needs to deliver risk-relevant answers on a timeline that matches how the firm moves. In this case, a structured screening approach provided the sponsor with decision-ready data without turning over every stone.
Portfolio Value Impact
The sponsor now uses this screening approach to benchmark each new target against the platform’s broader security maturity and quantified risk exposure. It enables more informed decisions: flagging when risks are acceptable, when they’re outliers, and when they require action pre-close. More than a speed play, it’s a framework for applying consistent risk tolerance across a high-velocity investment strategy.
