Auxilio Inc. in Mission Viejo bought CynergisTek in Austin, Texas for up to $34.3 million—$26.8 million upfront and up to $7.5 million in milestone payments over the next five years.
Auxilio, best known for its managed print services to hospitals, expanded its information security services offerings when it acquired Redspin, a provider of HIPAA risk assessment services, and Delphiis, a security program developer in 2015.
CynergisTek works in health information privacy, compliance, and cybersecurity consulting.
Auxilio has a market cap of about $98 million and annual revenue of about $60 million; CynergisTek has annual revenue of about $15 million.
The companies have “numerous opportunities for mutually assisted growth,” said Auxilio Chief Executive Joe Flynn in a press release.
Auxilio took a five-year $14 million term loan from Avid Bank in Palo Alto to help pay for the acquisition.