Cybersecurity Is Now a Value Driver: Why Buyers Are Paying a Premium for Secure, Scalable IT Managed Services Firms
- donalosullivan
- 6 days ago
- 3 min read
Executive Summary
In 2025, cybersecurity has evolved from a technical concern into a strategic business imperative. For mid-sized technology and service firms, cybersecurity maturity directly influences acquirability, investor confidence, and valuation multiples. Buyers in M&A processes are now prioritising digital risk frameworks, compliance maturity, and incident readiness as part of their due diligence.
1. The Threat Landscape in 2025
Cybercriminals have become more organised and strategic. Ransomware-as-a-service, phishing-as-a-service, and supply chain attacks are targeting mid-market firms at an alarming rate. The 2024 IBM Cost of a Data Breach Report revealed the global average cost of a data breach reached $4.45 million, an all-time high.
Mid-sized firms, often with limited in-house security resources, are especially vulnerable. In the UK alone, the National Cyber Security Centre (NCSC) reported a 32% increase in targeted attacks on SMEs. Attackers view these companies as weak links in larger value chains.
2. Cybersecurity as a Growth Enabler
Cybersecurity is not just about defence, it’s about growth and commercial trust. Companies with strong cybersecurity postures are more likely to win enterprise contracts, pass audits, and secure growth capital. Standards such as ISO 27001, NIS2 Directive, and GDPR compliance are now considered hygiene factors.
A 2024 PwC report found that 61% of executives said a company’s cybersecurity posture influenced their investment decisions. One overlooked breach or poorly handled incident can derail a funding round or acquisition. Conversely, a firm with a clean record, modern security infrastructure, and strong documentation often commands a valuation premium of 15–25%.
3. Due Diligence Spotlight
Cybersecurity is now a core part of M&A due diligence. Buyers are no longer satisfied with a basic IT checklist, they want evidence of maturity. Key diligence items include:
Incident response and disaster recovery plans
Endpoint detection and response (EDR) tools
MFA and data encryption
Third-party risk assessments
Frequency of security training and testing
Companies that can demonstrate regular penetration testing, SOC 2 or ISO 27001 certifications, and cybersecurity KPIs (e.g., mean time to detect/respond) are far more likely to pass diligence with confidence.
4. The Rise of Cybersecurity-as-a-Service (CaaS)
With the complexity and cost of building internal security teams, many mid-market firms are adopting managed cybersecurity services. This approach provides 24/7 monitoring, compliance support, and scalable protection.
IDC predicts that by 2026, 60% of mid-market firms will rely on CaaS models to meet regulatory and customer requirements. CaaS partners also help firms prepare for diligence by documenting controls, tracking audit trails, and facilitating regular vulnerability scans.
Beyond risk mitigation, CaaS enables companies to focus on core operations while ensuring they meet growing expectations from enterprise customers, regulators, and investors.
5. Conclusion & Vico’s Perspective
At Vico Advisory, we help technology-enabled firms understand the strategic role cybersecurity plays in value creation. Whether preparing for exit, seeking growth capital, or aiming to differentiate in a competitive market, having a strong cyber foundation is essential.
The below is a list of Irish-based acquirers of IT managed services/cybersecurity companies that are active in the market: Nostra, Ekco, Viatel, Arkphire, Ergo and TEKenable.
Cybersecurity isn’t just a cost, it’s a catalyst for scale, credibility, and long-term success. With the right strategy and partnerships in place, mid-sized IT service firms can turn risk into opportunity and command premium multiples when it matters most.
If you’re unsure where your business stands, our team at Vico is ready to assess your cybersecurity readiness and help you build a roadmap that speaks to both investors and buyers.
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Sources:
IBM. “Cost of a Data Breach Report 2024.” https://www.ibm.com/reports/data-breach
UK National Cyber Security Centre. “Annual Review 2024.” https://www.ncsc.gov.uk/files/NCSC_Annual_Review_2024.pdf
PwC. “Global Digital Trust Insights 2024.”https://www.pwc.com/gx/en/news-room/press-releases/2023/digital-trust-insights.html
IDC. “Top Predictions 2024: Future of Digital Infrastructure. https://www.idc.com/getdoc.jsp?containerId=prAP53207425
