November 16, 2018 / 9:40 AM / a month ago

BlackBerry to buy cybersecurity firm Cylance for $1.4 billion

FILE PHOTO: A sign is displayed on the building Blackberry's offices in Waterloo, Ontario, Canada, May 29, 2018. REUTERS/Mark Blinch

(Reuters) - BlackBerry Ltd raised its bets on artificial intelligence and cybersecurity on Friday with the $1.4 billion purchase of California-based machine-learning specialists Cylance.

The Canadian technology company, which dominated the smartphone market a decade ago, has shifted to selling software to manage mobile devices, as well as emerging areas like autonomous cars.

Privately owned Cylance uses machine learning to preempt security breaches before they occur. Its applications seek to block malware or infiltration attempts rather than react after a breach.

Cylance, which has over 3,500 active enterprise customers, had been considering filing for a stock market floatation, according to a report in Business Insider. read.bi/2PuA7uN

“Cylance’s leadership in artificial intelligence and cybersecurity will immediately complement our entire portfolio,” BlackBerry CEO John Chen said in a statement.

The California-based company’s Chief Executive Stuart McClure, in turn, said it would be able to leverage Blackberry’s strength in mobile communications and security to adapt its AI technology.

Besides the $1.4 billion that BlackBerry will pay, the deal also includes the assumption of Cylance’s unvested employee incentives, BlackBerry said.

Cylance will continue to operate as a separate business unit after the deal closes, BlackBerry said. The deal is expected to close by Feb 2019.

U.S.-listed shares of Blackberry were marginally up in light pre-market trading.

Reporting by Bhargav Acharya and Debroop Roy in Bengaluru; Editing by Sunil Nair and James Emmanuel

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