CynergisTek Announced Expiration of the Excluded Party "Go-Shop" Period in Previously Announced Merger Agreement With Clearwater Compliance LLC

Author: Charles Gross | June 29, 2022 07:09am
CynergisTek, Inc. (NYSE:CTEK) ("CynergisTek"), leading cybersecurity, privacy, compliance, and IT audit firm helping organizations in highly regulated industries navigate emerging security and privacy issues, announces the expiration of the Excluded Party "go-shop" period set forth in the previously announced merger agreement ("Merger Agreement") with Clearwater Compliance LLC (collectively with its affiliates, "Clearwater"), a healthcare focused cybersecurity, compliance, and risk management solutions firm, in an all cash transaction that values CynergisTek at approximately $17.7 million. All capitalized but undefined terms used herein have the meanings given in the Merger Agreement. As previously announced, prior to the expiration of the initial "go-shop" period under the Merger Agreement, CynergisTek received an Acquisition Proposal from a potential strategic buyer who had been contacted by CynergisTek's financial advisors (the "Go-Shop Proposal"), and thereafter CynergisTek has been engaged in negotiations with the potential strategic buyer regarding the terms and conditions of the Go-Shop Proposal. As previously announced, on June 22, 2022, the CynergisTek Board of Directors (the "Board") determined, in good faith after consultation with its outside financial advisor and legal counsel, that the Go-Shop Proposal would reasonably be expected to lead to a Superior Proposal, thereby making the potential strategic buyer an Excluded Party under the terms of the Merger Agreement. After continued negotiation with the potential strategic buyer prior to the expiration of the Excluded Party "go-shop" period under the Merger Agreement, at this time the Board has not determined that the Go-Shop Proposal constitutes a Superior Proposal, and there can be no assurances that a transaction will result from the Go-Shop Proposal or that any alternative transaction will be entered into or consummated. Following the expiration of the "go-shop" period under the Merger Agreement, CynergisTek became subject to customary "no-shop" restrictions that limit its and its representatives' ability to solicit alternative acquisition proposals from third parties, subject to customary "fiduciary out" provisions. At this time, CynergisTek remains subject to the Merger Agreement and is complying with the terms and conditions thereof, which remain in effect unless and until the Merger Agreement is terminated. Accordingly, subject to and as required by the Merger Agreement, the Board has not made a Company Board Recommendation Change, reaffirms its recommendation of the Merger Agreement and rejects all Alternative Acquisition Agreements. CynergisTek does not intend to disclose developments with respect to this process unless and until it determines it is appropriate to do so, subject to the terms of the Merger Agreement. The proposed merger and the Merger Agreement will be submitted to CynergisTek's stockholders for their consideration at a special meeting of its stockholders. In connection therewith, CynergisTek intends to file relevant materials with the SEC, including a definitive proxy statement on Schedule 14A, which will be mailed or otherwise disseminated to CynergisTek's stockholders when it becomes available. The foregoing description of the Merger Agreement and the transactions contemplated thereby is subject to, and is qualified in its entirety by reference to, the full terms of the Merger Agreement, which CynergisTek filed on May 23, 2022, as an exhibit to a current Report on Form 8-K. Advisors American Growth Capital is acting as financial advisor to CynergisTek, with Kirton McConkie PC acting as CynergisTek's legal counsel.

Posted In: CTEK