BlackBerry Stock Is Rising Monday: What's Going On?

BlackBerry Ltd BB shares are trading higher Monday after the company announced an acquisition agreement for its endpoint security assets.

What Happened: BlackBerry and Arctic Wolf entered into a definitive agreement for Arctic Wolf to acquire BlackBerry’s Cylance endpoint security assets. Cylance’s AI-based endpoint protection is trusted by thousands of organizations around the world.

Under the terms of the agreement, BlackBerry will sell the Cylance assets to Arctic Wolf for $160 million in cash and approximately 5.5 million common shares of Arctic Wolf. The company expects to receive approximately $80 million in cash at closing and approximately $40 million in cash one year later.

“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,” said John Giamatteo, CEO of BlackBerry.

“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.”

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The proposed transaction is expected to close in BlackBerry’s fiscal fourth quarter. The company said there will not be any impact to BlackBerry’s secure communications portfolio of businesses.

BlackBerry is due to report financial results for its fiscal third quarter after the market close on Thursday. Analysts expect the company to report a loss of 1 cent per share and revenue of $150.76 million, according to estimates from Benzinga Pro.

BB Price Action: BlackBerry shares were up 16.5% at $3.13 at the time of publication Monday, according to Benzinga Pro.

Photo: courtesy of BlackBerry.