CynergisTek acquires Backbone Consultants, adding audit and privacy expertise
CynergisTek, which helps health systems maintain privacy and security readiness and regulatory compliance, says it will acquire IT risk advisory service Backbone Consultants for $7 million.
WHY IT MATTERS
The acquisition, whose terms include potential earnouts of $4 million over three years if Backbone meets certain benchmarks, expands CynergisTek's own risk advisory services and offers news expertise in privacy, security, auditing and complains
In its announcement of the deal, CynergisTek specifically noted the the opioid crisis, and said Backbone can better help its healthcare clients with the recurring third-party audits to required by the U.S. Drug Enforcement Agency to offer electronic prescriptions for controlled substances.
Backbone's audit services can help validate systems and processes needed for EPCS, officials said, while CynergisTek's privacy monitoring enables more efficient detection and identification of drug diversion or insider threats.
THE LARGER TREND
The initial $7 million price tag of the deal represents of $5.5 million in cash and $1.5 million in CynergisTek stock. The appeal of Backbone Consultants was its track record of growth, CynergisTek says – $3.6 million in revenue over the past year – and the IT and audit expertise of its principals, who come from major consulting firms and have established a base of healthcare clients that includes EHR vendors, device manufacturers and more.
ON THE RECORD
"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, in a statement.
"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."
"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."