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BlackBerry Sells Cylance to Arctic Wolf for $160M in Major Write-Down

Dec 16, 2024, 05:00 PM

BlackBerry Ltd. has agreed to sell its Cylance cybersecurity business to Arctic Wolf for $160 million in cash and 5.5 million shares of Arctic Wolf. The deal, which represents a significant write-down from the $1.4 billion BlackBerry paid for Cylance in 2018, is expected to close in BlackBerry's fiscal Q4. Under the terms, BlackBerry will receive approximately $80 million at closing and an additional $40 million a year later. The sale comes as BlackBerry seeks to refocus its strategy on more profitable areas like its secure communications business and its connected-car software unit, QNX. Cylance, which uses AI to detect malware and prevent cyberattacks, has struggled to maintain market share in the endpoint security sector, losing ground to competitors. This divestiture is part of BlackBerry's broader strategy to cut costs and achieve profitability, having already reduced annual costs by $135 million, with a goal of $150 million. BlackBerry stock was up 14.10% following the announcement. Cylance had a 1.3% market share in endpoint security in 2022 and posted a record $51 million loss for the fiscal year ending February 28, 2025.