BlackBerry buys security firm for $1.4B

TORONTO — BlackBerry Ltd. has signed a $1.4-billion US deal to acquire U.S. artificial intelligence and cybersecurity company Cylance in what the company called the largest deal in its history.

BlackBerry executives told analysts on Friday that they were keen on acquiring California-based Cylance because it is a pioneer in applying artificial intelligence, algorithmic science and machine learning to cyber security software.

The acquisition helps solidify BlackBerry’s shift away from its past life as a smartphone company to software and security services, including its QNX business, which is focused on the automotive sector.

“This acquisition did two things for us,” said John Chen, BlackBerry’s chairman and chief executive. “It will provide BlackBerry with additional cybersecurity capabilities with state-of-theart artificial intelligence and machine-learning technology, that could be utilized across our entire portfolio. Secondly, it’s the key investment to our future software and services growth in the enterprise market.”

Under the agreement, Cylance will continue to operate as a separate business. Cylance was founded in 2012 by former McAfee/Intel employees Ryan Permeh and Stuart McClure. It has 3,500 enterprise customers, including more than 20 per cent of Fortune 500 companies.

McClure, Cylance’s chief executive and chairman, feels BlackBerry and his company complement each other and share a vision of securing and connecting every endpoint — a technology term used to describe the connections to the internet — in the world. He said Cylance offers BlackBerry a mathematical approach to cybersecurity because it uses artificial intelligence prediction and computers trained to process millions of files and tasks to uncover the DNA of attacks and prevent them.

BlackBerry cautioned investors about it having a huge impact on earnings.