CynergisTek, which generated around $15 million in revenue in 2016, is a health information security, privacy and compliance services provider. It will operate as an independent and wholly-owned subsidiary of Auxilio and as part of the agreement, Auxilio’s Redspin division will become part of CynergisTek.
The initial consideration of $26.8 million includes around $15 million in cash, 1.17 million shares of Auxilio common stock and a seller’s note in the amount of $9 million. To fund the cash portion of the transaction, Auxilio will enter into a five-year loan from Avid Bank for $14 million.
In addition to the initial payment, additional earn outs of up to $7.5 million may be paid over the next five years.
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