Blackberry To Acquire Cylance To Expand Into Cybersecurity

BlackBerry Limited (NYSE:BB) recently announced that it has inked a definite agreement to acquire Irvine, CA-based cybersecurity firm Cylance for $1.4 billion in cash. The transaction, which is one of the largest in recent years, is likely to be completed prior to the end of Blackberry’s current fiscal year in February 2019.

Privately-owned Cylance has created a niche for itself in the cybersecurity domain with a highly recurring revenue stream. It has more than 3,500 active enterprise customers, including premier blue chip companies. It is a pioneer in applying AI, algorithmic science and ML program to cybersecurity software to protect mobile devices, tablets and other Internet-connected devices from cyber attacks. This fast-growing company’s software is designed to consume less power, both in online and offline modes.

Cylance’s highly skilled cybersecurity workforce and market-leading portfolio of endpoint solutions are a strategic fit for Blackberry (TO:BB) and will complement its Unified Endpoint Management and QNX businesses. The company further expects that the addition of Cylance will enhance the cybersecurity capabilities of Blackberry Spark, making it an indispensible proposition for Enterprise of Things (EoT). While BlackBerry Spark offers secure chip-to-edge communications platform for the EoT to create trusted connections between any endpoint, QNX empowers leading OEMs to build secure, scalable, and trusted software solutions for connected and autonomous cars.

Cylance expects to gain from Blackberry’s global reach and extensive client base to better serve its customers. It further anticipates leveraging Blackberry's strength in mobile communications and security to adapt its own AI technology to offer a comprehensive package to customers. The transaction, therefore, is a win-win deal for both the companies. Post integration, Cylance is likely to operate as a separate business unit within Blackberry.

Operating as a leading player in the enterprise mobility management, BlackBerry is widely recognized for its productivity and security innovations. The company delivers one of the most secure end-to-end mobile enterprise solutions in the market through a broad portfolio of products and services. It offers an end-to-end software and services platform for the EoT, which includes computers, vehicles, sensors, equipment and other connected endpoints within the enterprise that communicate with each other to enable smart business processes.

BlackBerry has recorded an average decline of 12.4% in the past year compared with a decline of 13.9% for the industry.

BlackBerry currently sports a Zacks Rank #1 (Strong Buy). Some other stocks in the broader industry worth considering are Harris Corporation (NYSE:HRS) and Juniper Networks, Inc. (NYSE:JNPR) , carrying a Zacks Rank #2 (Buy) and QUALCOMM Incorporated (NASDAQ:QCOM) , sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Harris topped earnings estimates in each of the trailing four quarters, the average surprise being 7.1%.

Juniper has a long-term earnings growth expectation of 5.3%. It beat earnings estimates in each of the trailing four quarters, the average surprise being 11%.

Qualcomm has a long-term earnings growth expectation of 10.9%. Its trailing four-quarter average positive earnings surprise is 19.8%.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>