Arctic Wolf has acquired Cylance, BlackBerry’s cybersecurity division, for $160 million, a sharp decline from the $1.4 billion BlackBerry paid for the startup in 2018.
As part of the agreement, which is expected to close during BlackBerry’s fiscal Q4, the company will receive $80 million upfront, with the remaining payment due a year later. Additionally, BlackBerry will acquire approximately 5.5 million common shares in Arctic Wolf.
BlackBerry CEO John Giammatteo described the deal as mutually beneficial, stating, “This transaction is advantageous for all stakeholders. Customers will continue to enjoy uninterrupted service and benefit from Arctic Wolf’s expertise in cybersecurity. Arctic Wolf gains Cylance’s endpoint security solutions to enhance its platform, and BlackBerry will benefit as a shareholder and reseller, especially for government clients.”
Once a significant part of BlackBerry’s pivot from smartphones to enterprise services, the Cylance acquisition was its largest deal to date. Cylance was initially integrated into BlackBerry’s platform while operating independently. However, it struggled to compete in the crowded cybersecurity market, where rivals surpassed its AI-powered threat analysis software. By 2022, Cylance held just 1.3% of the endpoint security market, which focuses on protecting devices like computers and smartphones.
Giammatteo attributed Cylance’s underperformance to a shift in the market toward threat detection and response products, an area where Cylance lacked offerings. On a recent earnings call, he noted that the division would require substantial investment to reignite growth.
Cylance’s financial strain was significant, with BlackBerry’s cybersecurity division reporting a $51 million loss in the fiscal year ending February 2025. Earlier this year, CFO Tim Foote announced plans to redirect spending from Cylance to more profitable segments like BlackBerry’s secure communications business.
Investors reacted positively to the sale, with BlackBerry shares rising nearly 16% by mid-day ET.
In a blog post, Arctic Wolf Chief Product Officer Dan Schiappa praised Cylance’s distinctive approach to endpoint security, stating, “Cylance customers will continue to receive robust support, now enhanced by Arctic Wolf’s resources and expertise.” He emphasized that endpoint security remains a priority for Arctic Wolf, which plans to elevate Cylance’s solutions to new heights.
This acquisition marks Arctic Wolf’s sixth since its founding in 2012, following purchases like RootSecure, Tetra Defense, and Habitu8. The addition of Cylance strengthens its portfolio and positions the company as a leader in cybersecurity innovation.
