CynergisTek, Inc. Acquires Backbone Consultants to Bolster its Market Position as a Leader in Cybersecurity, Compliance, & Da...
01 November 2019 - 3:00PM
Business Wire
Acquisition Adds Security, IT Audit, and Data
Privacy Capabilities to its Growing Managed Professional Service
Offerings
CynergisTek, Inc., (NYSE AMERICAN: CTEK), a leader in
cybersecurity, privacy, and compliance, today announced that it has
acquired Backbone Enterprises, Inc. DBA Backbone Consultants, an
industry leader in IT risk advisory services. 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.
More information about the transaction will be available in a
Current Report on Form 8-K, which will be promptly filed with the
SEC, as well as on CynergisTek's 100 Day CEO Strategy Call and
Webcast, to be held on November 5, 2019, at 1:00 pm Eastern
Time.
Strategy Call
Date: Tuesday, November 5, 2019 Time: 1:00 pm Eastern Time /
10:00 am Pacific Time Toll Free: 1-888-220-8451 Toll/International:
1-323-794-2588 Conference ID: 8425531 Webcast:
http://public.viavid.com/index.php?id=136932
A replay of the call will be available from 4:00 pm ET on
November 5, 2019, to 11:59 pm ET on November 12, 2019. To access
the replay, please dial 1-844-512-2921 from the U.S. and
1-412-317-6671 from outside the U.S. The PIN is 8425531.
About Backbone Enterprises, Inc.
Backbone Consultants has progressively built its reputation on
delivering premium quality Information Technology (IT) Risk
Advisory Services while supplying best-in-class customer service to
our business partners. Originally established by Walter Zuniga in
2008, the company has developed a strong expertise in the areas of
cybersecurity, IT audit, and data privacy. Backbone has been
successful in building a strong client base with multiple Fortune
1,000 companies.
About CynergisTek, Inc.
CynergisTek is a top-ranked cybersecurity, privacy, and
compliance management consulting firm dedicated to serving the
healthcare industry. CynergisTek offers specialized services and
solutions to help organizations achieve privacy, security, and
compliance goals. Since 2004, the company has served as a partner
to hundreds of healthcare organizations and is dedicated to
supporting and educating the industry by contributing to relevant
industry associations. The company has been named in numerous
research reports as one of the top firms that provider
organizations turn to for privacy and security and won the 2017
Best in KLAS award for Cybersecurity Advisory Services.
Forward-Looking Statements
This release contains certain forward-looking statements
relating to the business of CynergisTek that can be identified by
the use of forward-looking terminology such as “believes,”
“expects,” “anticipates,” “may” or similar expressions. Such
forward-looking statements involve known and unknown risks and
uncertainties, including uncertainties relating to product/service
development, long and uncertain sales cycles, the ability to obtain
or maintain patent or other proprietary intellectual property
protection, market acceptance, future capital requirements,
competition from other providers, the ability of our vendors to
continue supplying the company with equipment, parts, supplies and
services at comparable terms and prices and other factors that may
cause actual results to be materially different from those
described herein as anticipated, believed, estimated or expected.
Certain of these risks and uncertainties are or will be described
in greater detail in our Form 10-K and Form 10-Q filings with the
Securities and Exchange Commission, which are available at
http://www.sec.gov. CynergisTek is under no obligation (and
expressly disclaims any such obligation) to update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20191101005112/en/
Investor Relations Contact: CynergisTek, Inc. Bryan Flynn
(949) 382-1419 InvestorRelations@cynergistek.com
Media Contact: Aria Marketing Danielle Johns (617)
332-9999 x241 djohns@ariamarketing.com
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