Blackberry makes $1.4B purchase
TORONTO In its biggest deal yet, BlackBerry Ltd. is buying a cybersecurity company that boasts artificial-intelligence technology capable of predicting digital attacks that customers may not see coming.
Waterloo, Ont.-based BlackBerry announced Friday that it had agreed to buy Irvine, Calif.based Cylance Inc. for US$1.4 billion in cash, in addition to taking on responsibility for unvested employee incentive awards.
Industry watchers had been expecting BlackBerry, a former smartphone giant that has shifted away from hardware and towards software, to make some kind of acquisition after the company won a US$940 million arbitration award last year in a fight over royalties with chipmaker Qualcomm Inc.
“This is the largest acquisition in BlackBerry ’s history,” John Chen, executive chairman and CEO of the company, said on a conference call. The deal is expected to close before the end of the company’s current fiscal year in Feb. 2019, pending regulatory approvals and other closing conditions.
BlackBerry noted the deal would particularly complement its QNX unit, which makes software for cars, and its UEM unit, which helps secure various devices, such as smartphones or laptops.
A presentation on the deal said that Cylance’s AI-backed products both predict and protect “against known and unknown threats.”
The private company and its 900 staff, according to BlackBerry, can typically identify and analyze threats 25 months before they emerge. Cylance says it does its work by applying AI, algorithmic science and machine learning to cybersecurity. “We prove every day that you can actually identify attacks long before they ever start,” said Stuart McClure, chairman and chief executive at Cylance. “What we call the unknown unknowns, and we truly prevent them.”
Under the deal, Cylance would continue to function as an independent business unit.
Chen said that Cylance’s customer base would also complement that of his own company, which he noted includes clients in the financial service and government sectors. “There are no doubts in my mind that we are acquiring cutting-edge technology," he added.