CynergisTek to be acquired by Clearwater Compliance for $17.7M

CynergisTek, the longtime privacy, security and health IT audit company, agreed this week to be acquired by Clearwater, which specializes in cyber compliance and risk management services for healthcare clients.

WHY IT MATTERS
The agreement stipulates an all cash transaction worth some $17.7 million. With a successful completion of the merger, CynergisTek investors will receive $1.25 per share in cash – a 112% over its May 20 closing share price.

Thereafter, CynergisTek will become a privately held subsidiary of Clearwater – a portfolio company of funds affiliated with healthcare investor Altaris Capital Partners – and CynergisTek shares will no longer be listed publicly.

The two organizations will partner, from different angles, to help healthcare organizations, and others in similarly highly-regulated industries, manage evolving compliance demands and cybersecurity imperatives.

“We believe that merging Clearwater and CynergisTek as a private company, will allow the combined entity to be more agile with greater flexibility to continue investing in innovation with the opportunity to scale as a managed service provider expanding and enhancing its service portfolio,” said Mac McMillan, President and CEO of CynergisTek, in a statement.

“Many industries, not just healthcare, are turning to MSPs for the support and expertise they need to meet today’s cyber threats.”

THE LARGER TREND
This past October, Healthcare IT News Managing Editor Bill Siwicki spoke with McMillan, who had recently returned to the CEO role at CynergisTek, which he cofounded. (This followed a two-year stretch where it was led by Caleb Barlow.)

Asked in 2021 how he viewed the current cybersecurity landscape, McMillan said “it has never been more complicated,” or more critical to navigate efficiently.

“The attack surface for all organizations has increased tremendously over the last few years to where attacks now come from all directions and within,” he explained. “For security, this means another paradigm shift toward better data, device and network security, building resilience into one’s program and operations, and less reliance on the old practice of guarding the gates. This is not something that most healthcare organizations have embraced yet.”

ON THE RECORD
“The combination of our companies will result in a comprehensive portfolio of solutions that add significant value for our customers and for the healthcare industry,” said Clearwater CEO Steve Cagle this week about the merger. “We are incredibly excited to bring together two of the top healthcare focused cybersecurity companies and look forward to working hand in hand with colleagues at CynergisTek to support our customers and proactively address their growing cybersecurity and compliance needs.”

“Building on our combined leadership position we’ll be able to create a more valuable platform for the industry and our clients,” McMillan added. “This is an exciting new chapter for CynergisTek that would not have been possible without our employees’ hard work and commitment to our customers, partners, investors and each other.”

Twitter: @MikeMiliardHITN
Email the writer: [email protected]
Healthcare IT News is a HIMSS publication.

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