Blackberry to buy AI and cybersecurity group Cylance for $1.4bn
By Michele Maatouk
Date: Friday 16 Nov 2018
(Sharecast News) - Blackberry has agreed to buy artificial intelligence and cybersecurity company Cylance for $1.4bn in cash.
The deal, which also includes the assumption of unvested employee awards, is expected to close before the end of Blackberry's current fiscal year in February 2019.
Executive chairman and chief executive John Chen said: "Cylance's leadership in artificial intelligence and cybersecurity will immediately complement our entire portfolio, UEM and QNX in particular. We are very excited to onboard their team and leverage our newly combined expertise.
"We believe adding Cylance's capabilities to our trusted advantages in privacy, secure mobility, and embedded systems will make Blackberry Spark indispensable to realising the Enterprise of Things."
Blackberry Spark is a next-generation secure chip-to-edge communications platform for the EoT that will create and leverage trusted connections between any endpoint.
Cylance co-founder, chairman and CEO Stuart McClure said: "Our highly skilled cybersecurity workforce and market leadership in next-generation endpoint solutions will be a perfect fit within Blackberry where our customers, teams and technologies will gain immediate benefits from Blackberry's global reach.
"We are eager to leverage Blackberry's mobility and security strengths to adapt our advanced AI technology to deliver a single platform."
Founded in 2012, Cylance generates highly recurring revenue from over 3,500 active enterprise customers, including more than 20% of the Fortune 500.
RBC Capital Markets analyst Paul Treiber said: "Since the reports of the potential acquisition of Cylance surfaced last week, we've had a number of discussions with investors and feedback has been mixed.
"On one hand, investors are enthusiastic about the long term strategy and shift towards cyber security. On the other hand, there are some concerns about the valuation multiple, the competitiveness of the endpoint management market and the reduction in Blackberry's net cash from $1.8bn to likely $0.4bn after the acquisition."
At 1240 GMT, Blackberry shares were up 0.5% at $8.90 in pre-market trade.
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