BlackBerry announced on Nov. 16 that it will purchase Cylance for $1.4 billion in cash. Cylance is an artificial intelligence and cybersecurity firm, which should help BlackBerry expand its sector that develops software for next-generation autonomous cars, known as its QNX unit.
The California-based Cylance is known for making AI-based products that prevent cyber attacks on companies. According to a report in Business Insider, the company recently considered filing an IPO. In June, BlackBerry CEO John Chen had laid out acquisition criteria during an annual meeting, and Cylance reportedly fits all of the criteria well. In his recent announcement regarding the acquisition, Chen apologized for keeping investors waiting so long for the announcement.
No matter how long the wait was, it seems that the purchase of Cylance will be a worthwhile investment for BlackBerry. The Canadian company that once dominated the market for new-age phones was quickly left behind once Apple proved itself in the smartphone world with the iPhone. As BlackBerry devices dwindled in popularity, the company redirected its business model to focus on licensing its devices, as well as on the development of software and services.
Currently, BlackBerry’s pack of cybersecurity offerings includes Microsoft Office applications, notable automakers, and corporate-issued smartphones. As 58% of all businesses are worried about cyber attacks affecting their companies, this acquisition could position BlackBerry as a leader in protection services.
BlackBerry already has partnerships with Ford Motor and Jaguar in its initiatives to develop autonomous cars. Both brands will use BlackBerry’s new cybersecurity product that is focused on connected vehicles and Internet of Things application, known as Jarvis.
With BlackBerry’s rocky road of relevancy, those who keep a close eye on the market were skeptical of their ability to afford this major purchase. Just last quarter, BlackBerry had $2.26 billion in short-term investments and cash and $739 million in long-term debt, which is down by approximately $1 billion over the last three years. When BlackBerry was able to pull off the Cylance deal without overwhelming its balance sheet in debt, those same watching investors were pleasantly surprised.