Security software provider Arctic Wolf has entered into a definitive agreement to acquire BlackBerry’s Cylance endpoint security assets for $160 million.
Subject to customary closing conditions, the deal is expected to close in BlackBerry’s fourth fiscal quarter and will see the firm receive approximately $80 million in cash upon closure of the deal, with around $40 million to follow one year later.
BlackBerry will also receive around 5.5 million common shares of Arctic Wolf.
The move marks a dramatic discount for Cylance – the company BlackBerry purchased for $1.4 billion in cash in 2018 as part of its transition away from mobile devices and towards cybersecurity software and services.
Post-transaction, Arctic Wolf will add Cylance’s suite of endpoint security capabilities and AI functionality to its own open-XDR security platform, Aurora, in a move the firm said will bolster its endpoint-to-the-edge coverage.
“By incorporating Cylance’s endpoint security capabilities into our open-XDR Aurora platform, we will be addressing a rampant need for a truly unified, effective security operations that delivers better outcomes for customers,” explained Nick Schneider, Arctic Wolf’s president and chief executive officer.
“We believe we will be able to rapidly eliminate alert fatigue, reduce total risk exposure, and help customers unlock further value with our warranty and insurability programmes.”
Arctic Wolf eyes 'world-class’ offerings
The addition of a native endpoint security solution to Arctic Wolf’s portfolio marks the next stage of the company’s mission to build one of the market’s largest XDR security platforms that allows customers the option to leverage more than 15 supported endpoint solutions.
According to Arctic Wolf, Cylance thwarts 98% of attacks before they occur, thanks to the offering’s unified security operations capabilities and comprehensive attack surface coverage.
The firm said its integration into Aurora will create a ‘world-class’ endpoint protection solution to rival the best in the industry.
“By adding endpoint security to our platform, we will be delivering the security outcomes organizations want in one, frictionless operational platform to go toe-to-toe with today’s advanced threats, while maintaining our commitment to customers and partners leveraging other endpoint solutions,” commented Dan Schiappa, chief product and services officer at Arctic Wolf.
‘No impact’
For BlackBerry, the company said the sale will have ‘no impact’ on its Secure Communications portfolio – which includes BlackBerry UEM, BlackBerry AtHoc and BlackBerry SecuSUITE – with the business to continue to play an ‘integral part’ in its operations.
The firm also confirmed it will act as a reseller of the Arctic Wolf-owned Cylance business.
“We see this transaction as a win-win for our shareholders and all other stakeholders,” said John Giamatteo, chief executive officer of BlackBerry.
“Our customers will realise the benefits of continuity of service and the expertise that a global cyber security 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.”
