BlackBerry stock got a boost Friday on news it will acquire AI company Cylance.
The deal will have BlackBerry (NYSE:BB) spending $1.40 billion to purchase Cylance. BB will also be assuming the unvested incentive awards for the AI company’s employees.
BlackBerry says that the acquisition of Cylance will be good for the company as it works on its Internet of Things efforts. This includes taking advantage of the company’s cybersecurity strengths to provide protection for its own products.
The good news for BlackBerry stock is that beefing up its cybersecurity could help customers be more accepting of the service. A recent Gartner poll found cyber security to be the top concern among respondents at 35%. Privacy concerns and potential risks and liabilities were also in the top five for that poll. Each of them were a top concern for 25% of respondents.
“Our highly skilled cybersecurity workforce and market leadership in next-generation endpoint solutions will be a perfect fit within BlackBerry where our customers, teams and technologies will gain immediate benefits from BlackBerry’s global reach,” Stuart McClure, Cofounder, Chairman, and CEO of Cylance, said in a statement. “We are eager to leverage BlackBerry’s mobility and security strengths to adapt our advanced AI technology to deliver a single platform.”
BlackBerry still needs to complete customary closing conditions before the deal can close. This includes getting approval from regulators. If all goes well, the company is expecting the deal to close by the end of its current fiscal year, which is February 2019.
BB stock was up nearly 3% at its peak Friday morning, but is now only up slightly from its starting price.
As of this writing, William White did not hold a position in any of the aforementioned securities.