Arctic Wolf and BlackBerry announced they have entered into a definitive agreement for Arctic Wolf to buy BlackBerry's Cylance endpoint security assets. Cylance is a pioneer of AI-based endpoint protection trusted by thousands of organizations worldwide. Through this acquisition, Arctic Wolf ushers in a new era of simplicity, flexibility, and outcomes to the endpoint security market.

Under the terms of the deal, BlackBerry will sell its Cylance assets to Arctic Wolf for $160 million of cash, subject to certain adjustments, and about 5.5 million common shares of Arctic Wolf. After allowing for the purchase price adjustments, BlackBerry will receive approximately $80 million of cash at closing and approximately $40 million of cash one year following the closing. This proposed transaction is subject to customary closing conditions and is expected to close in BlackBerry's fourth fiscal quarter.

Arctic Wolf is a leader in AI-based security operations, delivering solutions from a single open platform to meet customers' needs for effective, comprehensive, and reliable security outcomes. By adding Cylance's trailblazing suite of endpoint security capabilities and enhanced AI functionality, Arctic Wolf will bolster its position as a market-leading platform provider, offering coverage from the endpoint to the edge. And as many organizations are looking to consolidate an increasing number of disparate security tools, there is a rapidly growing demand for end-to-end platforms.

There will be no impact on BlackBerry's Secure Communications portfolio of businesses, which includes BlackBerry UEM, BlackBerry AtHoc, and BlackBerry SecuSUITE. And the Secure Communications business will remain an integral part of the BlackBerry portfolio.

Through the addition of a native endpoint security solution to its portfolio, Arctic Wolf is building one of the largest open XDR security platforms in the industry, enabling customers and partners to have the option to utilize over 15 supported endpoint solutions. Arctic Wolf is currently the only security operations leader offering this type of optionality, which combined with its comprehensive approach to minimizing risk through security operations, it uniquely positioned to drive value for customers of all sizes and security maturity.

Perella Weinberg Partners served as exclusive financial adviser to BlackBerry, and Morrison Foerster served as legal adviser to BlackBerry. And Cooley served as legal adviser to Arctic Wolf.

KEY QUOTES:

"Security has an operations and effectiveness problem and endpoint solutions alone have failed to live up to the outcomes they have promised for years. By incorporating Cylance's endpoint security capabilities into our open-XDR Aurora platform, we will be addressing a rampant need for a truly unified, effective security operations that delivers better outcomes for customers. We believe we will be able to rapidly eliminate alert fatigue, reduce total risk exposure, and help customers unlock further value with our warranty and insurability programs."

"I am incredibly excited to partner with Arctic Wolf through this agreement. We see this transaction as a win-win for our shareholders and all other stakeholders. 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."