There is an Arctic Wolf acquired BlackBerry's beleaguered cybersecurity business Cylance acquired for $160 million; that's a significant discount from the $1.4 billion BlackBerry mercenary Acquiring the startup in 2018.

Under the terms of the agreement, which is expected to be completed in BlackBerry's fourth fiscal quarter, BlackBerry will sell its Cylance assets to Arctic Wolf for $160 million in cash. BlackBerry will receive approximately $80 million at closing and the remainder of the tranche a year later, receiving approximately 5.5 million shares of Arctic Wolf's common stock.

"We view this transaction as a win-win for our shareholders and all other stakeholders," BlackBerry CEO John Giammatteo said in a statement. “Our customers will realize the benefits of service continuity and expertise provided by a global cybersecurity leader like Arctic Wolf. Arctic Wolf benefits by adding Cylance's endpoint security solutions to its native platform. Finally, as Arctic Wolf scales to develop and grow the Cylance business, BlackBerry will benefit by becoming a reseller of the portfolio to our large government customers and a shareholder of the company.”

About eight years ago, BlackBerry, once known for its keyboard smartphones, touted its Cylance acquisition as a key component of its push into enterprise services. It was BlackBerry's largest merger and acquisition deal to date - all cash - and saw Cylance integrate its technology with BlackBerry's existing platforms but continue to operate as a largely independent business unit.

But Cylance, founded in 2015 by former McAfee and Intel duo Stuart McClure and Ryan Permeh, has struggled to gain a foothold in the increasingly crowded cybersecurity industry. The company's AI-powered cyber threat analysis software has slowly lost ground to its competitors; based on Cylance had just 1.3% of the endpoint security market in 2022, according to IDC. (Endpoint security refers to protecting devices such as desktops, laptops, and mobile devices.)

Giammatteo was accused Cylance's failure is partly due to the market shifting towards threat detection and response products that Cylance does not offer. "Cylance requires significant investment to spur growth," he said in question In a recent BlackBerry earnings call.

Cylance had also become a major liability for BlackBerry's broader cybersecurity division, posting a record loss of $51 million for the fiscal year ending February 28, 2025. Earlier this year, BlackBerry CFO Tim Foote said the company would try to redirect Cylance and other spending. costly areas to expand more profitable units, such as the secure communications business.

Investors seem to approve of this, too. BlackBerry shares rose approximately 16% as of midday ET.

One blog postArctic Wolf CPO Dan Schiappa called Cylance's approach to endpoint security "fundamentally unique" and said it will allow Arctic Wolf to deliver "an innovative, expanded and enhanced endpoint security solution" to the market.

“For Cylance customers, the endpoint security products you rely on every day will not only continue to be fully supported, but will also benefit from Arctic Wolf's resources and expertise,” Schiappa said. “Endpoint security is a key priority for us as a company, and as one of the leading platform companies in cybersecurity, Arctic Wolf is uniquely equipped to provide the resources, innovation and expertise needed to take Cylance's endpoint products to the next level. .”

Cylance is Arctic Wolf's sixth acquisition since its founding in 2012. The firm's others include secure intelligence platform RootSecure, threat hunting platform Rank Software, security education startup Habitu8, digital forensics firm Tetra Defense and security orchestration software developer. revelstoke.