The acquisition expands CynergisTek’s cybersecurity, privacy, and IT risk advisory services and is consistent with CynergisTek’s strategic plan to grow managed services through targeted, accretive acquisitions.
“Backbone Consultants’ suite of services will immediately complement our entire portfolio as well as provide additional IT risk audit services and GDPR readiness, and prepare us for the opportunity with the California Consumer Privacy Act,” said Caleb Barlow, CEO and President of CynergisTek.
“We will look to leverage CynergisTek’s existing client base to cross-sell our services, leverage our back office to bring more efficiency and support to the Backbone team, and look to convert Backbone’s annual audits into a managed service. We’re thrilled that Backbone is part of CynergisTek and are excited to support its continued growth, customers, and employees.”
“Our highly skilled security, IT audit, and data privacy professionals will be a perfect fit within CynergisTek where our customers and employees will see an immediate benefit from CynergisTek’s national presence,” said Walter Zuniga, Managing Partner at Backbone Consultants.
“We look forward to continuing our success in the cybersecurity, IT audit, and privacy compliance market as we utilize the strengths of CynergisTek.”
With a history of strong recurring revenue growth, Backbone Consultants generated approximately $3.6 million in revenues over the last 12 months of operations and CynergisTek believes the acquisition will be immediately accretive to its earnings.
Backbone Consultants’ leadership team is comprised of three former Big Four consulting leaders and 14 security, privacy, and IT audit experts.
In addition, Backbone brings multi-year contracts with a diverse and growing customer base in both healthcare and non-healthcare, including two Fortune 1,000 EHR vendors and one of the largest medical device manufacturers in the market.
With the acquisition of Backbone Consultants, CynergisTek is directly at the intersection of patient privacy, information security, and the opioid crisis. Providers are required to have recurring third-party audits to offer electronic prescriptions for controlled substances (EPCS).
Backbone’s EPCS audit service validates that the systems and processes used for electronic prescriptions meet required security requirements set by the DEA.
In addition, CynergisTek’s privacy monitoring practice allows for efficient identification of drug diversion or insider threats by constantly monitoring patient and prescription records to identify unusual patterns of behavior.
Initial consideration of approximately $7.0 million consists of $5.5 million in cash and $1.5 million in CynergisTek common stock. Additional earn-out consideration of up to $4 million over three years could be triggered if Backbone Consultants meets specified financial criteria.