Arctic Wolf, a leading cybersecurity company, has acquired Cylance, BlackBerry's beleaguered cybersecurity business, for $160 million in cash. The deal, expected to close in BlackBerry's fiscal Q4, marks a significant write-down from the $1.4 billion BlackBerry paid to acquire Cylance in 2018.

Under the terms of the agreement, BlackBerry will sell its Cylance assets to Arctic Wolf for $160 million, with approximately $80 million paid at closing and the remaining amount to be paid a year later. Additionally, BlackBerry will receive roughly 5.5 million common shares in Arctic Wolf. The deal is seen as a win-win for both parties, with BlackBerry CEO John Giammatteo stating that the transaction will benefit shareholders and stakeholders alike.

Cylance, founded in 2015 by Stuart McClure and Ryan Permeh, was once touted as a major component of BlackBerry's pivot towards enterprise services. However, the company struggled to maintain its market share in the increasingly crowded cybersecurity sector. According to IDC, Cylance had only 1.3% of the endpoint security market in 2022. The company's AI-powered cyberthreat-analyzing software slowly lost ground to rivals, and it became a major drain on BlackBerry's broader cybersecurity division, posting a record $51 million loss for the fiscal year ending February 28, 2025.

In a blog post, Arctic Wolf CPO Dan Schiappa praised Cylance's approach to endpoint security as "fundamentally unique" and stated that it would enable Arctic Wolf to bring to market an "innovative, expanded, and refined endpoint security solution." Schiappa assured Cylance customers that the endpoint security products they rely on would not only continue to be fully supported but would also benefit from the resources and expertise of Arctic Wolf.

The acquisition is Arctic Wolf's sixth since its founding in 2012, with previous acquisitions including RootSecure, Rank Software, Habitu8, Tetra Defense, and Revelstoke. The deal is seen as a strategic move by Arctic Wolf to expand its endpoint security offerings and strengthen its position in the cybersecurity market.

The acquisition also marks a significant shift for BlackBerry, which is redirecting its focus towards more profitable units, such as its secure communications business. The company's CFO, Tim Foote, had earlier stated that BlackBerry would look to redirect spending from Cylance and other costly areas to grow its more profitable units.

The deal is expected to have significant implications for the cybersecurity industry, with Arctic Wolf's acquisition of Cylance likely to increase competition in the endpoint security market. As the cybersecurity landscape continues to evolve, the acquisition is seen as a strategic move by Arctic Wolf to stay ahead of the curve and provide innovative solutions to its customers.

In conclusion, the acquisition of Cylance by Arctic Wolf marks a significant turning point for both companies. While BlackBerry is shifting its focus towards more profitable units, Arctic Wolf is expanding its endpoint security offerings and strengthening its position in the cybersecurity market. As the industry continues to evolve, it will be interesting to see how this acquisition shapes the future of cybersecurity.