BlackBerry Sells Cylance for $160M

Arctic Wolf Acquires Cylance from BlackBerry for $160 Million

Arctic Wolf has completed the acquisition of Cylance, BlackBerry’s cybersecurity division, in a deal valued at $160 million. This represents a substantial reduction in price compared to the $1.4 billion BlackBerry initially invested in acquiring the startup back in 2018.

Deal Terms and Financial Details

The agreement, anticipated to finalize during BlackBerry’s fiscal fourth quarter, involves the sale of Cylance assets to Arctic Wolf for $160 million in cash. BlackBerry is set to receive approximately $80 million upon the deal’s closure, with the remaining portion payable a year later. Additionally, BlackBerry will gain around 5.5 million common shares in Arctic Wolf.

BlackBerry CEO John Giammatteo expressed confidence in the transaction, stating it benefits all stakeholders. He highlighted the continuity of service for customers, leveraging Arctic Wolf’s global cybersecurity expertise. Arctic Wolf, in turn, expands its platform with Cylance’s endpoint security solutions, and BlackBerry will function as a reseller to government clients while holding shares in the company.

BlackBerry’s Initial Investment and Cylance’s Struggles

Approximately eight years ago, BlackBerry positioned the Cylance acquisition as a pivotal step in its transition towards enterprise services, moving away from its smartphone origins. This was BlackBerry’s largest merger and acquisition to date, executed entirely in cash.

However, Cylance, established in 2015 by Stuart McClure and Ryan Permeh – both formerly of McAfee and Intel – encountered difficulties in establishing a strong position within the competitive cybersecurity landscape. Its AI-driven threat analysis software gradually lost market share, achieving only 1.3% of the endpoint security market in 2022, as reported by IDC. Endpoint security focuses on safeguarding devices such as desktops, laptops, and mobile devices.

Shifting Market Dynamics and Financial Impact

Giammatteo attributed Cylance’s challenges, in part, to the market’s preference for threat detection and response solutions, which Cylance did not provide. He indicated that substantial investment would be necessary to stimulate growth within Cylance.

Cylance also became a significant financial burden for BlackBerry’s cybersecurity division, incurring a record loss of $51 million for the fiscal year concluding on February 28, 2025. Earlier in the year, BlackBerry CFO Tim Foote announced plans to reallocate funds from Cylance and other high-cost areas to bolster more profitable segments, such as its secure communications business.

Market Reaction and Future Outlook

The market responded positively to the news, with BlackBerry’s stock increasing by nearly 16% by mid-day ET.

Arctic Wolf’s Perspective and Integration Plans

In a blog post, Arctic Wolf CPO Dan Schiappa described Cylance’s approach to endpoint security as “fundamentally unique.” He stated that the acquisition will allow Arctic Wolf to deliver an “innovative, expanded, and refined endpoint security solution.”

Schiappa assured Cylance customers that existing products will continue to be fully supported and enhanced with Arctic Wolf’s resources and expertise. He emphasized that endpoint security is a key priority for Arctic Wolf, and the company is well-positioned to advance Cylance’s endpoint products.

Arctic Wolf’s Acquisition Strategy

The Cylance acquisition marks Arctic Wolf’s sixth acquisition since its founding in 2012. Previous acquisitions include RootSecure (secure intelligence platform), Rank Software (threat hunting platform), Habitu8 (security training startup), Tetra Defense (digital forensics firm), and Revelstoke (security orchestration software developer).