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November 16, 2018

Blackberry Agrees to Buy Cylance for $1.4 Billion

"We plan to integrate Cylance technology with our Spark platform"

By CBR Staff Writer

BlackBerry has announced it is acquiring cybersecurity specialist Cylance for $1.4 billion in its largest ever acquisition.

The announcement ends days of market speculation.

The deal will add a “world-class technical team” of 300+ software engineers and data scientists, ~100 patents in cybersecurity and machine learning to Blackberrys stable, the company said.

It will also extend Blackberry’s TAM (total available market) into the $11B+
high-growth cybersecurity endpoint market. The deal is expected close by February 2019, subject to approvals.

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California-based Cylance, founded in 2012, develops AI-based endpoint protection and response products. It recently considered filing for an IPO.

The company generates what Blackberry described as highly recurring revenue from over 3,500 active enterprise customers, including over 20 percent of the Fortune 500.

See also: Why Investment in the Cybersecurity Market is Taking Off

“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,” said John Chen, Executive Chairman and CEO of BlackBerry.

“We believe adding Cylance’s capabilities to our trusted advantages in privacy, secure mobility, and embedded systems will make BlackBerry Spark indispensable to realizing the Enterprise of Things.”

According to Gartner in its most recent Internet of Things Backbone Survey: security was cited as the top barrier to IoT success (35 percent).

Blackberry said the acquisition will make it the first vendor to offer a single solution for intelligently protecting and managing fixed and mobile IoT endpoints.

“We plan on immediately expanding the capabilities across BlackBerry’s ‘chip-to-edge’ portfolio, including QNX, our safety-certified embedded OS that is deployed in more than 120 million vehicles, robot dogs, medical devices, and more”, the company said.

“Over time, we plan to integrate Cylance technology with our Spark platform, which is at the center of our strategy to ensure data flowing between endpoints (in a car, business, or smart city) is secured, private, and trusted.

BlackBerry expects that after the anticipated close of the transaction, Cylance will operate as a separate business unit within BlackBerry Limited.

Some analysts have voiced concerns at any large-scale acquisition by the company, saying it has significant debt and falling enterprise software revenues. As of Aug 31, 2018, BlackBerry had $581 million of cash and cash equivalents and $739 million of long-term debt.

The company’s total cash, cash equivalents, short-term and long-term investments were $2.4 billion as of the same day.

More to follow post midday conference call.

See also: New Blackberry Spark Security Platform Aims to be IoT Backbone


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