Skip to content Skip to navigation

Cybersecurity Consulting Firm CynergisTek Acquired by Auxilio

January 17, 2017
by Heather Landi
| Reprints

Austin, Tex.-based cybersecurity and privacy consulting firm CynergisTek has been acquired by Auxilio, Inc., a provider of document workflow solutions and IT security services based in Mission Viejo, California, in a deal valued at up to $34.3 million.

According to a press release from Auxilio acquired the consulting firm for initial consideration of approximately $26.8 million in combined cash, stock, and seller debt.  “Additional “earn outs” may be paid of up to $7.5 million over the next five years based on certain financial criteria being met,” company officials stated. Additionally, company officials stated that the acquisition “will enable the company to meet growing demand from healthcare customers for comprehensive IT security solutions that reduce risk and deliver long-term value.”

CynergisTek generated approximately $15 million in revenues and $5 million of EBITDA in 2016, according to the press release.

CynergisTek will continue to operate independently as a wholly-owned subsidiary of Auxilio, and, as part of the deal, Auxilio’s Redspin division will become part of CynergisTek, to complement existing offerings such as penetration testing, security assessment and risk management solutions, and to bolster technical resources and capabilities. 

CynergisTek co-founders Mac McMillan and Michael Mathews, Ph.D., launched CynergisTek in 2004. The company was recognized in the 2016 KLAS Security Advisory Services report for having the highest overall client satisfaction, performance and impact on security preparedness in healthcare. McMillan, currently CynergisTek CEO, and Mathews, currently president and COO, will take board positions in the combined entity and assume a significant ownership stake.

“With assets from Auxilio, we’ll have what we need to extend our offerings and to keep pace with market demand while simultaneously maintaining the superior level of client support we’ve become known for,” McMillan said in a statement. “Our clients recognize that document and device security are important components of their overall security risk profile and the ability to deliver an integrated approach to managing those aspects of their infrastructure along with the digital pieces we’ve traditionally focused on is something we are laying the foundation for now.”

Joe Flynn, CEO of Auxilio, said in a prepared statement, “We have long stated our desire to expand our reach in healthcare IT security and this acquisition puts us in an immediate leadership position in the category.  We have come to know the founders and employees of CynergisTek quite well over the last couple of years and from the earliest conversations it was obvious we shared a vision of what the future of healthcare IT security and document workflow looked like and how the two will become increasingly intertwined. While CynergisTek will continue to operate independently, there are numerous opportunities for mutually assisted growth over the near term and we foresee the ability to offer services under a combined umbrella over time. This is a truly unique fit and we could not be more excited to complete this transaction.”

 

 

 

 

Get the latest information on Cybersecurity and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Global EHR Market to Hit $33B by 2025, Report Finds

The global electronic health records (EHR) market is expected to reach $33.4 billion by 2025, according to new analysis from Research and Markets.

Change Healthcare Becomes First HIT Org to Join Blockchain Collaborative at Top Level

Hyperledger, an open source collaborative effort created to advance blockchain technology, has announced that Change Healthcare has become the first healthcare organization to join at the initiative’s top membership level.

UChicago Medicine, Google Collaborating to Use Machine Learning, EHRs to Reduce Readmissions

The University of Chicago Medicine is collaborating with Google on an initiative that focuses on using new machine-learning techniques to create predictive models that could help prevent unplanned hospital readmissions, avoid costly complications and save lives.

Pilot Projects Link PCORnet, FDA’s Sentinel Program

Two pilot projects under way are seeking to demonstrate the value of data linkage between the Patient-Centered Clinical Research Network (PCORnet) and other distributed networks, such as the FDA’s Sentinel program.

Report: Despite Uncertainty, Healthcare Execs Focused on Value-Based Care Strategies

Despite current uncertainties in the healthcare market, heightened by the recent passage of the Republican-led healthcare bill in the U.S. House of Representatives, most health system leaders are sticking to their existing business strategies, and will keep their organizations moving towards value-based care, according to a new leadership survey by national healthcare advisory firm BDC Advisors.

Report: Clinical, IT Leaders Need to Increase Collaboration on IT Investments

A HIMSS Analytics and Vocera survey report examines the collaboration between clinical and IT leaders on clinical IT investments and also has some interesting findings on the extent that clinical IT contributes to care team, and IT team, burnout.