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 primarily manages print documents for hospitals. It expanded its information security services offerings when it acquired HIPAA risk-assessment services provider Redspin in 2015 and security program developer Delphiis in 2014.
CynergisTek works in health information privacy, compliance, and cybersecurity consulting and has annual revenue of about $15 million.
“The trend is [moving] toward hospitals to want to partner with cybersecurity consulting firms,” said Auxilio Chief Executive Joe Flynn, noting opportunities for “mutually assisted growth.”
Auxilio took a five-year, $14 million term loan from Avid Bank in Palo Alto to help pay for the acquisition. It has a market cap of about $98 million and annual revenue of about $60 million.
—Sherry Hsieh
