Waterloo, Ontario-based BlackBerry has divested its Cylance cybersecurity business in a deal with Arctic Wolf.
Cylance became a key part of BlackBerry’s efforts to rebrand itself in cybersecurity after it bought the company six years ago in a $1.4 billion deal.
On Monday, Arctic Wolf acquired Cylance, which uses artificial intelligence to help users detect malware and prevent cyberattacks, for just $160 million. The deal also includes approximately 5.5 million shares of common stock in Arctic Wolf, a privately held U.S. security software and services company.
“(BlackBerry) is selling it at a significantly discounted price from what they originally paid for it,” said Ritesh Kotak, a cybersecurity technology analyst. “The fact that they are removing it from their portfolio and giving it to another organization makes me think: what is the future of BlackBerry?”
CTV News reached out to BlackBerry to ask that exact question, as well as how the $160 million valuation was determined and whether any jobs will be lost because of the sale of Cylance.
These questions were not answered directly, but a BlackBerry spokesperson said it was “incredibly pleased” with the outcome.
As for Arctic Wolf, the sale is an opportunity to expand its growing line of cybersecurity tools.
“We’re going to leverage BlackBerry (and) Cylance’s technology into the technology we already have. This allows us to detect threats faster and more effectively,” said Dan Deeth, Arctic Wolf’s senior director of communications.
Although the company’s headquarters is located south of the border, Arctic Wolf’s first office was actually in Waterloo region and the Cylance acquisition will have a local advantage.
“We have almost 800 employees working in the area and, probably within 12 to 18 months, we will have over 1,000,” Deeth said.
The move will also help retain local tech talent. Several Arctic Wolf employees previously worked at BlackBerry or Waterloo-based Sandvine before accusations that the company provided technology used to inject spyware into the devices of critics of the Egyptian government.
“We’ve seen this time and time again,” Kotak said. “How can we retain Canadian talent and Canadian intellectual property without shipping it across the border and across the world? Canada is known for having some of the best AI or cybersecurity professionals in the world.
This is exactly what Arctic Wolf plans to capitalize on: using local minds and technologies with local roots to stay ahead of threat actors in a space that knows no borders.
