Contact: Scott Denne Chris Hazelton
BlackBerry looks to right another ship with the $425m cash acquisition of Good Technology. Brimming with confidence following the comeback from its own near-sinking, BlackBerry is taking on the mobile management software vendor, which was poised for a public offering earlier this year, yet never pulled the trigger – instead, it added another $80m in private financing to its then-dwindling cash pile.
BlackBerry is transforming itself from a device maker to a mobile security software provider for enterprises. Good is a leading mobile security vendor, but the two companies have often clashed when it comes to mobile messaging. With the future in supporting and securing mobile apps, Good is further along on this route when it comes to iOS and Android. This deal offers BlackBerry a major opportunity to catch up to and surpass the competition. Good has more than 2,000 ISV- and customer-developed apps, which now gives BlackBerry one of the largest mobile app ecosystems. There may be some overlap in customers, but BlackBerry did experience a long period of customer migration, and some of that went to Good. In effect, BlackBerry might be buying back former customers.
Good posted decent growth last year, racking up $211m in revenue for an increase of 32%. However, its losses were excruciating, at $95m for the year, and losses the previous two years were in the same neighborhood. While spending heavily on topline acceleration isn’t rare among its peers, Good didn’t have much to show for it once you take into account that one-third of that revenue came from its legacy consumer products and intellectual property licenses, two segments that were not expected to be meaningful contributors in the long term – more so today as BlackBerry was Good’s most significant licensee.
We’ll have a full report on this transaction in our next 451 Market Insight.
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