CynergisTek Acquires Backbone Consultants to Enhance Healthcare Audit and Privacy Expertise

VCBeat (WeChat ID: vcbeat) learned from foreign media that on November 1, 2019, local time, CynergisTek, a cybersecurity and privacy consulting firm focused on the healthcare sector, announced its acquisition of IT risk advisory services provider Backbone Consultants (“Backbone”) for $7 million.

The initial price of this transaction is $7 million, comprising $5.5 million in cash and CynergisTek stock valued at $1.5 million. CynergisTek stated that Backbone’s appeal lies, on one hand, in its growing performance track record—with Backbone generating $3.6 million in revenue over the past year—and, on the other, in the expertise of its team in IT and auditing, with many members hailing from large consulting firms. Currently, Backbone has established a healthcare client base that includes EHR vendors, medical device manufacturers, and others.

Under the agreement, Backbone may receive $4 million in funding over the next three years if it achieves certain milestones. This acquisition not only expands CynergisTek’s risk advisory services but also augments its talent pool with specialists in privacy, security, auditing, and complaints management.

In its statement, CynergisTek specifically highlighted the opioid crisis and noted that Backbone Consultants can better assist its healthcare clients in conducting third-party audits to comply with U.S. Drug Enforcement Administration (DEA) requirements for electronic prescribing of controlled substances.

CynergisTek, founded in 2004 and headquartered in Texas, USA, is dedicated to providing a suite of solutions for healthcare providers, payers, and vendors. These solutions help clients evaluate their privacy and security programs in compliance with regulatory requirements and assist them in developing best practices for risk management. The company’s services include cybersecurity, privacy program assessments, simulated audit services, medical device security services, vendor security management, and patient privacy management.

CynergisTek’s medical device security services help multiple stakeholders—including those in IT, security, and clinical engineering—identify the quantity and types of network-connected medical devices, and manage security vulnerabilities in medical devices that contain electronic protected health information (ePHI).

Backbone Consultants, established in 2008 and headquartered in Minnesota, USA, is an IT risk consulting firm. The company assists clients with IT asset and security management to help drive their business success.

“Backbone’s audit services can help validate the systems and processes required for Engineering, Procurement, and Construction (EPC) projects, while CynergisTek’s privacy monitoring can more effectively detect and identify drug diversion or insider threats,” said Caleb Barlow, CEO and President of CynergisTek. “We will leverage CynergisTek’s existing customer base to cross-sell our services, utilize our back-office infrastructure to bring greater efficiency and support to the Backbone team, and aim to convert Backbone’s annual audit business into managed services.”

Walter Zuniga, Executive Partner at Backbone Consultants, stated: “Our seasoned professionals in security, IT audit, and data privacy are an excellent fit for CynergisTek. Our clients and employees will immediately benefit from CynergisTek’s nationwide presence. We look forward to leveraging CynergisTek’s strengths to continue achieving success in the markets for cybersecurity, IT audit, and privacy regulatory compliance.”

(Compiled by He Li)