Arctic Wolf Acquires BlackBerry’s Cylance Business for $160 Million
A Significant Discount from the Original Price of $1.4 Billion
In a significant move in the cybersecurity sector, Arctic Wolf has acquired BlackBerry’s beleaguered Cylance business for $160 million, a substantial discount from the original price of $1.4 billion that BlackBerry paid to acquire the startup in 2018.
Deal Terms and Expectations
Under the terms of the deal, which is expected to close in BlackBerry’s fiscal Q4, BlackBerry will sell its Cylance assets to Arctic Wolf for $160 million in cash. BlackBerry will receive approximately $80 million at closing and the remaining tranche a year later, along with roughly 5.5 million common shares in Arctic Wolf.
BlackBerry CEO John Giammatteo’s Statement
"We see this transaction as a win-win for our shareholders and all other stakeholders," said BlackBerry CEO John Giammatteo in a statement. "Our customers will realize the benefits of continuity of service and the expertise that a global cybersecurity leader like Arctic Wolf provides. Arctic Wolf benefits by adding Cylance’s endpoint security solutions to its native platform. Finally, as Arctic Wolf leverages its scale to build upon and grow the Cylance business, BlackBerry will benefit as a reseller of the portfolio to our large government customers and as a shareholder of the company."
Cylance’s Struggles in the Cybersecurity Sector
Close to eight years ago, BlackBerry was pitching the Cylance buy as a major component of its pivot toward enterprise services. It was BlackBerry’s largest M&A deal to date — all in cash — and saw Cylance integrate its tech with BlackBerry’s existing platforms, but largely continue to operate as a standalone business unit.
However, Cylance struggled to maintain a foothold in an increasingly crowded cybersecurity sector. The company’s AI-powered cyberthreat-analyzing software slowly lost ground to rivals; according to IDC, Cylance had just 1.3% of the market for endpoint security in 2022. (Endpoint security refers to protection for devices like desktops, laptops, and mobile devices.)
Giammatteo Blames Market Shift
Giammatteo blamed Cylance’s failure in part on the market’s shift to threat detection and response products, which Cylance doesn’t offer. "Cylance [would require] significant investment to drive growth," he said on a recent BlackBerry earnings call.
Cylance Becomes a Drain on BlackBerry
Cylance had also become a major drain on BlackBerry’s broader cybersecurity division, posting a record $51 million loss for the fiscal year ending February 28, 2025. Earlier this year, BlackBerry CFO Tim Foote said that the company would look to redirect spending from Cylance and other costly areas to grow its more profitable units, like its secure communications business.
Investors Approve of the Deal
Investors seem to approve of the deal, with BlackBerry stock up nearly 16% as of mid-day ET. In a blog post, Arctic Wolf CPO Dan Schiappa called Cylance’s approach to endpoint security "fundamentally sound" and expressed confidence in its ability to drive growth.
Arctic Wolf’s Plans for Cylance
Arctic Wolf has ambitious plans for Cylance, with Schiappa stating that the company will continue to invest in Cylance’s existing technology and personnel. Arctic Wolf aims to leverage Cylance’s expertise in endpoint security to further expand its own offerings and capabilities.
Conclusion
The acquisition of Cylance by Arctic Wolf marks a significant shift in the cybersecurity sector, with both companies poised for growth and expansion. The deal’s success will depend on Arctic Wolf’s ability to effectively integrate Cylance’s technology and personnel into its existing operations and drive growth through new investments and initiatives.
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