To enable its corporate clients manage smartphones running on different operating systems, Canada’s BlackBerry Ltd announced their intention of buying rival mobile software provider Good Technology Corp for $425 million.
In recent years, this one-time smartphone pioneer, has shifted focus of its operations device management software for enterprise customers and the company hopes of roping in new customers for its services business.
More than half the devices running on Good’s systems are Apple Inc products such as the iPhone.
The deal is expected to be complete in late November and BlackBerry hopes to mop up $160 million in revenue from the acquisition in the first year after the deal closes. The new of the acquisition resulted in a 1.1 percent rise in its shares to reach C$7.97 in early trading on Monday at the Toronto share exchange market.
Though the deal would cost Blackberry a fortune, BlackBerry is confident of remaining cash flow positive overall. On a call with analysts and investors, BlackBerry Chief Executive John Chen said: “There obviously will be hard work involved. But I do see a lot of opportunity here to drive value for our shareholders”.
Till the time BlackBerry manages to develop a unified platform that customers can upgrade to, the company would maintain both company’s products, Chen added. It would take around two years for BlackBerry to develop a combined platform, Chen informed.
BlackBerry and Silicon Valley-based Good technology have earlier settled a series of patent lawsuits in 2004 and the two companies have not been at best of relations. BlackBerry even criticized a press release by Good Technology’s product announcements in a blog post, annotating the rival company’s press release in red ink, recently as in January 2015.
“There is a very long history here. We are in an incredibly competitive market and speak to many of the same customers,” said Good Chief Executive Christy Wyatt in an interview posted on BlackBerry’s news site.
Good Technology is confident that the company’s technology would help BlackBerry to better manage “Internet of things” devices, provide support to wearable technology such as the Apple Watch and other Android-based competitors, said Wyatt.
BlackBerry has in recent times embarked on a series of acquisitions to expand its services business. In July, Chen had announced that the company would likely engage in more acquisitions.
Analysts are equating the Good Technology acquisition to previously announced deals for Secusmart, Movirtu and WatchDox.
J.P. Morgan Securities LLC and Bank of America Merrill Lynch served as valuers and financial advisers for Good on the deal.
Good had filed for an IPO as recently as March this year after a failed $100m attempt in May 2014. Good Technology was once bought by Motorola for around $500m.
Responding to the news, Good CEO and Motorola, Apple and Palm alumnus Christy Wyatt tweeted: “Despite its waning fortunes, BlackBerry's ability to provide a secure communications platform for its enterprise customers is still widely respected, with a footprint in all of G7 and 16 of the G20 nations. Good is no security slouch either: the Sunnyvale, California, firm services 6,200 organisations across 190 countries including all of the Fortune 100 commercial banks, aerospace and defence firms,” tweeted Good CEO reacting to the news of acquisition.
(Source: www.financialtimes.com)
In recent years, this one-time smartphone pioneer, has shifted focus of its operations device management software for enterprise customers and the company hopes of roping in new customers for its services business.
More than half the devices running on Good’s systems are Apple Inc products such as the iPhone.
The deal is expected to be complete in late November and BlackBerry hopes to mop up $160 million in revenue from the acquisition in the first year after the deal closes. The new of the acquisition resulted in a 1.1 percent rise in its shares to reach C$7.97 in early trading on Monday at the Toronto share exchange market.
Though the deal would cost Blackberry a fortune, BlackBerry is confident of remaining cash flow positive overall. On a call with analysts and investors, BlackBerry Chief Executive John Chen said: “There obviously will be hard work involved. But I do see a lot of opportunity here to drive value for our shareholders”.
Till the time BlackBerry manages to develop a unified platform that customers can upgrade to, the company would maintain both company’s products, Chen added. It would take around two years for BlackBerry to develop a combined platform, Chen informed.
BlackBerry and Silicon Valley-based Good technology have earlier settled a series of patent lawsuits in 2004 and the two companies have not been at best of relations. BlackBerry even criticized a press release by Good Technology’s product announcements in a blog post, annotating the rival company’s press release in red ink, recently as in January 2015.
“There is a very long history here. We are in an incredibly competitive market and speak to many of the same customers,” said Good Chief Executive Christy Wyatt in an interview posted on BlackBerry’s news site.
Good Technology is confident that the company’s technology would help BlackBerry to better manage “Internet of things” devices, provide support to wearable technology such as the Apple Watch and other Android-based competitors, said Wyatt.
BlackBerry has in recent times embarked on a series of acquisitions to expand its services business. In July, Chen had announced that the company would likely engage in more acquisitions.
Analysts are equating the Good Technology acquisition to previously announced deals for Secusmart, Movirtu and WatchDox.
J.P. Morgan Securities LLC and Bank of America Merrill Lynch served as valuers and financial advisers for Good on the deal.
Good had filed for an IPO as recently as March this year after a failed $100m attempt in May 2014. Good Technology was once bought by Motorola for around $500m.
Responding to the news, Good CEO and Motorola, Apple and Palm alumnus Christy Wyatt tweeted: “Despite its waning fortunes, BlackBerry's ability to provide a secure communications platform for its enterprise customers is still widely respected, with a footprint in all of G7 and 16 of the G20 nations. Good is no security slouch either: the Sunnyvale, California, firm services 6,200 organisations across 190 countries including all of the Fortune 100 commercial banks, aerospace and defence firms,” tweeted Good CEO reacting to the news of acquisition.
(Source: www.financialtimes.com)
