Arctic Wolf has acquired Cylance, BlackBerry’s beleaguered cybersecurity business, for $160 million — a significant discount from the $1.4 billion BlackBerry paid to acquire the startup in 2018.
Under the terms of the deal, which is expected to close in BlackBerry’s fiscal Q4, BlackBerry will sell its Cylance assets to Arctic Wolf for $160 million in cash. BlackBerry will get ~$80 million at closing and the rest of the tranche a year later, along with roughly 5.5 million common shares in Arctic Wolf.
“We see this transaction as a win-win for our shareholders and all other stakeholders,” BlackBerry CEO John Giammatteo said in a statement. “Our customers will realize the benefits of continuity of service and the expertise that a global cybersecurity leader like Arctic Wolf provides. Arctic Wolf benefits by adding Cylance’s endpoint security solutions to its native platform. Finally, as Arctic Wolf leverages its scale to build upon and grow the Cylance business, BlackBerry will benefit as a reseller of the portfolio to our large government customers and as a shareholder of the company.”
Close to eight years ago, BlackBerry, once known for its keyboard-sporting smartphones, was pitching the Cylance buy as a major component of its pivot toward enterprise services. It was BlackBerry’s largest M&A deal to date — all in cash — and saw Cylance integrate its tech with BlackBerry’s existing platforms, but largely continue to operate as a standalone business unit.
But Cylance, founded in 2015 by former McAfee and Intel duo Stuart McClure and Ryan Permeh, struggled to maintain a foothold in an increasingly crowded cybersecurity sector. The company’s AI-powered cyberthreat-analyzing software slowly lost ground to rivals; according to IDC, Cylance had just 1.3% of the market for endpoint security in 2022. (Endpoint security refers to protection for devices like desktops, laptops, and mobile devices.)
Giammatteo blamed Cylance’s failure in part on the market’s shift to threat detection and response products, which Cylance doesn’t offer. “Cylance [would require] significant investment to drive growth,” he said on a recent BlackBerry earnings call.
Cylance had also become a major drain on BlackBerry’s broader cybersecurity division, posting a record $51 million loss for the fiscal year ending February 28, 2025. Earlier this year, BlackBerry CFO Tim Foote said that the company would look to redirect spending from Cylance and other costly areas to grow its more profitable units, like its secure communications business.
Investors seem to approve. BlackBerry stock was up nearly 16% as of mid-day ET.
In a blog post, Arctic Wolf CPO Dan Schiappa called Cylance’s approach to endpoint security “fundamentally unique,” and said it would enable Arctic Wolf to bring to market an “innovative, expanded, and refined endpoint security solution.”
“For Cylance customers, the endpoint security products you rely on every day will not only continue to be fully supported, but will also benefit from the resources and expertise of Arctic Wolf,” Schiappa said. “Endpoint security is a key priority for us as a company, and as one of the leading platform companies in the cybersecurity space, Arctic Wolf is uniquely equipped to provide the resources, innovation, and expertise needed to take Cylance’s endpoint products to the next level.”
Cylance is Arctic Wolf’s sixth acquisition since its founding in 2012. The firm’s others include secure intelligence platform RootSecure, threat hunting platform Rank Software, security training startup Habitu8, digital forensics firm Tetra Defense, and security orchestration software developer Revelstoke.
