Managing Risks in Technology M&A: A Broker’s Guide
This article is the second in a three-part series about the role of insurance in tech sector mergers & acquisitions. It aims to help brokers navigate the process of securing a successful deal. Other articles in the series cover insurance risks and opportunities before and after a transaction.
In the fast-moving Irish technology sector, mergers and acquisitions remain a key driver of innovation and growth. From early-stage software firms to established data analytics companies, M&A can help scale intellectual property (IP), expand geographic reach, and accelerate development. However, while the promise of synergy and expansion is exciting, it is during the deal-making stage — the complex middle phase of M&A — that the greatest risks emerge. It’s an important time to take a clear-eyed look at potential complications involved.
“For brokers advising technology clients, this middle phase presents both a challenge and an opportunity,” said Ryan Murray Burke, Senior Technology Underwriter at Travelers Europe. “Managing risk during M&A requires not only technical knowledge of insurance cover, but also strategic insight into how technology businesses operate under commercial and regulatory pressures specific to Ireland.”
Irish technology market in context
Ireland’s M&A market has shown resilience despite global economic headwinds. In 2024, Ireland recorded nearly 500 completed transactions worth approximately €27.5 billion, outperforming the UK and other European neighbours.1 Technology, media and telecoms (TMT) consistently account for over a quarter of deal volume in Ireland, reflecting the sector’s dynamism.2
Foreign investment, especially from the US, drives a disproportionate share of this activity. Many of the world’s largest US technology companies base their European or EMEA headquarters in Ireland, giving Irish M&A a distinctly inbound profile compared to many other European locations.3
Prioritising risk management during M&A
This activity generates risks — and the M&A transaction process often brings about changes in how those risks are managed. In fact, according to insights from a 2025 Travelers Special Report, Today’s M&A trends – What Technology Risk Teams Need to Know, nearly all technology companies surveyed (91%) said they changed their risk management practices following a merger or acquisition.4
So what do they wish they had known earlier? The report highlighted some persistent vulnerabilities that could undermine a deal’s success: data breaches, gaps in cover, and cultural integration failures were key examples. In Ireland, the consequences of overlooking key exposures can be steep: Ireland is one of the most heavily regulated jurisdictions in Europe for technology companies. Oversight by the Irish Data Protection Commission (DPC) tends to be more intensive and better-resourced than typical UK equivalents. The DPC has issued some of the largest fines in the history of GDPR — including a billion-euro penalty against Meta.5
The cost of mismanaging risk can extend well beyond financial losses. For this reason, it’s critical for a business considering M&A to have a framework in place for measuring and prioritising the risks it faces.
Brokers can translate risk management into deal value
Once negotiations begin, the M&A process can progress rapidly, leaving little time for reflection. Amid legal and financial discussions, risk management can be relegated to a checklist exercise. This is a mistake — especially in technology transactions where intangible assets, data security and regulatory compliance form the backbone of enterprise value.
Further, when the cultural alignment of the combined entity is overlooked, its objectives, leadership styles and ways of working may not fit. This can result in culture and leadership clashes, weakened integration and the loss of key talent once the deal is complete. By thoughtfully moving through the steps of a transaction, brokers can help risks come to the surface early on so they can be managed in time.
For brokers, the middle phase of M&A is therefore the point at which specialist insight can deliver critical value. Here are some areas that call for special attention, along with some examples of how overlooked risks can generate costly consequences:
1. Anticipating data security and cyber risks
Every technology M&A deal involves the transfer of sensitive data — customer records, proprietary code, R&D and algorithms. Transferring, merging or reconfiguring these systems exposes vulnerabilities that cybercriminals can exploit. These risks underline the importance of cyber due diligence that goes beyond standard IT checks. Brokers can support clients by ensuring insurance programmes cover inherited and new cyber exposures, and by advising on continuity of cyber cover across integration milestones.
Scenario 1: Hidden breach in FinTech acquisition
Situation:
An Irish FinTech acquires a smaller payments platform only to discover that the target suffered an undisclosed breach pre-completion, exposing customer data.
Risk:
The acquirer inherits liabilities under EU GDPR, overseen by the DPC — the lead regulator for many multinational tech companies based in Ireland. The business faces regulatory inquiry, potential fines and reputational damage.
Lesson:
Conduct rigorous cyber due diligence and align cyber cover limits with the combined entity’s expanded risk profile. Specialist cyber due diligence — and insurance structured for acquisitions — can prevent a hidden breach from becoming a costly and damaging crisis.
2. Closing regulatory and compliance gaps
Regulatory compliance is a critical battleground in tech M&A. In Ireland, EU GDPR and the Data Protection Act 2018 apply directly to businesses processing personal data. As Ireland supervises the EU data protection compliance of many US tech giants (including Google, Meta, Apple and Microsoft), the DPC’s enforcement oversight is intensive — with significant data protection fines and enforcement actions that can affect deal risk profiles.6
Scenario 2: Overlapping data standards in cross-border merger
Situation:
An Irish software buyer acquires a UK competitor with differing data processing protocols. They discovered post-completion that the target had processed customer data under UK GDPR — without providing documentation that kept it in compliance with EU GDPR standards.
Risk:
Post-completion, the buyer faces overlapping GDPR compliance obligations and heightened scrutiny by the DPC due to the combined scale of processing.
Lesson:
Collaborate with clients’ legal teams to map out potential cross-border compliance issues. Offer insurance solutions that mitigate exposure to fines, investigations, or litigation arising from legacy practices.
3. Building integration and business continuity frameworks
Even when a deal makes strategic sense, operational integration often reveals unforeseen risks. Systems incompatibility, duplicated functions, and divergent company cultures can all erode the anticipated value of a merger. Early on, it’s important to assess and align differences in processes, reporting systems, claims history and record-keeping. Otherwise, the new entity could be exposed to repeat accidents and regulatory scrutiny — as well as workforce disruptions that stand in the way of a smooth integration.
Studies suggest that integration delays and workforce disruption can significantly reduce productivity — impacting factors including sales, talent retention and customer satisfaction.7 Ireland’s tight labour market adds retention pressure and attrition risk. To avoid those complications and others, it’s important to anticipate them during the transaction, not after it’s complete.
Brokers can help clients plan for continuity by reviewing business interruption insurance and assessing the potential for the loss of critical personnel that could destabilise product delivery or client relationships.
4. Reviewing protection gaps in insurance cover
A common oversight in Irish M&A is unaddressed gaps between buyer and target insurance portfolios. Differences in policy terms, exclusions, or renewal dates can leave exposures unprotected during the critical transition period.
To prevent such outcomes, brokers can ensure there is M&A insurance in place that provides a bridge of protection during the course of a transaction. Policies including Professional Indemnity (PI) and Cyber liability commonly include automatic acquisition cover as standard to maintain protection when businesses grow through acquisitions. This built-in protection is especially valuable in the technology sector, where M&A activity is frequent, as it prevents insurance gaps during important business expansion phases. Reviewing the target’s entire insurance portfolio — including Cyber, PI, Directors & Officers, and Property policies — can ensure continuity and identify areas where additional protection or interim cover is needed.
Scenario 3: Insurance gap during deal completion
Situation:
An Irish software client finalises acquisition of a data services provider, but the target’s PI policy lapses during the closing process. Weeks after completion, a client files a service-delivery claim — yet neither the buyer’s nor the target’s insurance responds fully.
Risk:
This timing gap leaves the merged entity exposed to a costly uninsured loss, including legal fees, settlement costs, and reputational damage. The dispute also delays integration and revenue recognition.
Lesson:
Offer an insurance review service for continuous insurance oversight and alignment of renewal dates during M&A.
5. Embracing strategic, human-centric partnerships
For brokers, M&A is an opportunity to partner with clients through a period of significant transformation. Brokers who understand both the technical and human dimensions of M&A can position themselves as indispensable risk partners.
For example, brokers can point out tailored insurance products that protect against transactional risks. They can engage financial and legal advisors early to provide support. Beyond identifying complex exposures, they can translate risks into clear strategic options that open new doors for decision-makers. This helps clients to not only complete deals, but to protect the value they create.
Scenario 4: Integration risks undermine merger value
Situation:
Two Irish AI software firms merge to expand their product offering. Despite strong strategic alignment, post-completion integration exposes system incompatibilities, causing project delays and customer frustration.
Risk:
Workflow disruption and staff uncertainty trigger a temporary sales decline, reducing productivity and eroding early deal value. The acquirer faces higher service costs and missed revenue targets.
Lesson:
Operational and cultural risks can erode merger value fast. Encourage clients to review continuity plans before completion. Ensure cover extends to newly acquired operations from day one.
What makes Ireland technology M&A different
Beyond insurance risks, brokers involved in M&A transactions have to navigate laws and other special considerations specific to Ireland that can impact the value of a deal.
Tax, IP and R&D considerations: Ireland’s favourable corporate tax regime — including a 12.5% rate on trading income and generous R&D tax credits — continues to attract global technology businesses. Recent policy enhancements increased Ireland’s R&D tax credit rate to 35%, reinforcing its appeal for R&D-intensive acquisitions.8
IP structures are also central to Irish M&A due to the prevalence of IP-intensive multinational operations in the country. Given that many US acquirers target Irish-headquartered European operations, due diligence often emphasises IP ownership, licensing arrangements, transfer pricing and double taxation treaty impacts — areas where brokers can collaborate with tax advisors to ensure risks are surfaced and insured.
Irish employment law and key-person risks: Irish employment law provides substantial protections for employees, including requirements for written terms of employment, statutory redundancy rights and protections from unfair dismissal — all of which can influence post-deal restructuring. Employers must observe fair procedures and statutory redundancy frameworks, and employees often enjoy protective rights that can constrain rapid post-deal changes.9
These structures impact key-person retention strategies, severance planning and potential D&O exposures — particularly where employees challenge dismissals or restructuring decisions after closing.
Insurance market and regulatory landscape: The Central Bank of Ireland regulates the insurance market, requiring authorisation and ongoing supervision for insurers and reinsurers operating in Ireland. Brokers advising on M&A should understand Irish regulatory expectations for continuity of cover and solvency frameworks, and how market practices interact with EU law.
In particular, D&O insurance in Ireland is critical given legal restrictions on company indemnification of directors and increasing regulatory scrutiny across data protection, financial services and ESG obligations.
Turning risk awareness into resilience
The middle stage of M&A is where risk crystallises. For Irish tech companies, this is where protecting intangible assets, maintaining compliance, and ensuring operational continuity matters most. But brokers who help clients manage this process smoothly stand to become valued longterm partners.
“Brokers who can skilfully navigate the Irish market while helping clients secure appropriate protections are essential to getting these transactions across the finish line. More importantly, they make it possible for these transactions to become platforms for sustainable innovation and growth.”
Ryan Murray Burke, Senior Technology Underwriter
Travelers Europe
This article is provided for general informational purposes only. It does not, and it is not intended to, provide legal, technical or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy issued by Travelers. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy provisions, and any applicable law.
Travelers operates through several underwriting entities in the UK and Europe. Please consult your policy documentation or visit the websites below for full information.
https://www.travelers.co.uk/
https://www.travelers.ie/
Sources:
1 https://practiceguides.chambers.com/practice-guides/corporate-ma-2025/ireland/trends-and-developments
2 https://www.davy.ie/binaries/content/assets/davy/capital-markets/h1-2025-ma-review-davy-corp-finance.pdf
3 https://fticommunications.com/a-global-spotlight-on-irelands-role-in-data-protection
4 https://asset.trvstatic.com/download/assets/2025-nology-m-and-a-special-report.pdf/2e4a2ffc930d11f08cd18668ee5e8a84
5 https://www.edpb.europa.eu/news/news/2023/12-billion-euro-fine-facebook-result-edpb-binding-decision_en
6 https://www.dataprotection.ie/en/who-we-are/data-protection-legislation
7 https://www.mckinsey.com/capabilities/m-and-a/our-insights/retain-integrate-thrive-a-strategy-for-managing-talent-during-m-and-a-transactions
8 https://www.reuters.com/business/ireland-increases-rd-tax-credit-rate-35-mulls-widening-scope-2025-10-07
9 https://www.citizensinformation.ie/en/employment/employment-rights-and-conditions/employment-rights-and-duties/employment-laws-in-ireland/
