What are the best practices for compliance in M&A processes?

To ensure a smooth M&A transaction, companies must conduct early compliance audits, assess cybersecurity and regulatory risks, prepare secure data rooms, document all policies and controls, and align on integration plans post‑acquisition.

Why M&A compliance matters

During M&A, compliance is not just a matter of legal hygiene—it’s a deal enabler. Acquirers need confidence that they’re not buying hidden liabilities like security debt, regulatory non‑compliance, or reputational risks.

When does this become essential

Situation	Why It Matters
Acquiring a regulated tech company	You must evaluate their compliance posture and readiness before integration
Entering into a cross‑border acquisition	Different jurisdictions bring privacy and legal risks (e.g., GDPR, HIPAA)
Acquiring a SaaS business with sensitive data	Security controls, third‑party risks, and breaches must be audited
Post‑deal operations	Gaps in compliance integration cause friction and security exposure

What strong M&A compliance looks like

Here’s a breakdown of the best practices companies follow to reduce risk and maintain deal velocity:

Best Practice	What It Means / How It Helps
Start early with a compliance due diligence checklist	Covers regulatory, cybersecurity, and contractual risks before signing term sheets
Centralize documents in a secure virtual data room	Makes it easier to collaborate with buyers and auditors, with version control
Audit data privacy and cybersecurity posture	Looks at data flows, access control, breaches, encryption, and recovery planning
Assess third‑party and vendor risks	Surface any inherited exposure from the supply chain or service providers
Review contracts, licenses, and compliance certifications	Make sure all critical documents are in order and accessible
Develop a post‑merger integration (PMI) plan	Align security roles, compliance frameworks, and reporting lines between companies
Engage external legal and compliance experts	Especially critical in regulated verticals like fintech, healthtech, or cross‑border M&A

What you can do now

• Build or update an M&A-specific due diligence checklist that includes cybersecurity, data privacy, and compliance documentation
• Conduct an internal self‑assessment so you’re not caught off‑guard during the buyer’s review
• Set up a secure data room with the most requested artifacts (SOC 2, ISO 27001, policies, audits, vendor logs, breach history)
• Run a tabletop exercise to simulate how you’d respond if a buyer asked for a deep dive on your compliance readiness

Simplify M&A due diligence with Sprinto

Sprinto helps startups centralize and automate compliance documentation—SOC 2 readiness, risk assessments, vendor security, access logs—so you’re always ready for investor or buyer scrutiny during high‑stakes M&A events.