BlackBerry Limited has entered into a definitive agreement to wholly acquire Cylance, an artificial intelligence and cybersecurity leader, for $1.4 billion in cash, plus the assumption of unvested employee incentive awards. Pending regulatory approvals and other customary closing conditions, the deal is expected to close prior to the end of BlackBerry’s current fiscal year (February 2019).
Cylance applies artificial intelligence, algorithmic science, and machine learning to cybersecurity software that has proven effective at predicting and preventing known and unknown threats to fixed endpoints. The fast-growing company was founded in 2012 and generates highly recurring revenue from over 3,500 active enterprise customers, including more than 20% of the Fortune 500.
According to Gartner in its most recent Internet of Things Backbone Survey: security was cited as the top barrier to IoT success (35%), with privacy concerns (25%), and potential risks and liabilities (25%) also in the top five.
The Cylance acquisition is in line with BlackBerry’s public strategy to secure endpoint devices but has raised eyebrows in the security community, given the company’s history with encryption backdoors.
Court documents indicate that as early as 2010 the Canadian federal police had a copy of BlackBerry’s global decryption key, installed in every consumer device at the factory. Anyone in possession of a copy of that key was able to decrypt text messages sent between BlackBerry’s consumer handsets. According to the company, none of BlackBerry’s current enterprise software products have a global decryption key.
Following the acquisition, the company plans to integrate Cylance’s anti-malware solution into the BlackBerry Spark platform, a next-generation secure chip-to-edge communications platform designed for high-security and industry-specific safety certifications.
BlackBerry expects that after the anticipated close of the transaction, Cylance will operate as a separate business unit within BlackBerry Limited.