BlackBerry Ltd (BBRY) Boosts Its Enterprise Portfolio with Good Technology Acquisition
The race for enterprise clients is just but heating up. BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), which has been a laggard in the sector, is now ramping up its efforts on the same. The Canadian software maker plans to buy rival software maker, Good Technology for $425 million according Indian Express
Expansion into iOS Ecosystem
BlackBerry plans to leverage Good’s technology as it seeks to help enterprise clients manage smartphones running on different OS. The deal should boost the software maker service business that has turned out to be a key source of revenue in the recent past. The idea is to attract more enterprise clients, which BlackBerry hopes to target with its software offerings.
Good’s Technology’s currently power iOS devices. The acquisition provides BlackBerry Ltd (NASDAQ:BBRY) an opportunity to expand further into the iOS platform. The deal should enhance company’s efforts of making its enterprise offerings available across the globe.
BlackBerry expects the deal to close at the end of November. The company is betting big on the acquisition with the belief that up to $160 million could be up for grabs in the first year. CEO, John Chen, is however unconcerned over claims of potential cash burn. The executive expects the company to remain cash flow positive even on completion of the deal.
For the start, both companies will develop their own products waiting for a unified platform that customers can upgrade to. One or two years is the amount of time needed or a unified product to come into being, according to the executive.
Long running feud
The merger comes as a surprise as the two companies have all along had a tense relationship. In 2004, the two settled a patent lawsuit whose effects continued to bite until the start of the year. BlackBerry Ltd (NASDAQ:BBRY) continued to critique Good’s product announcements. Even on the settlement of the patent lawsuit.
With the sideshows aside, Good’s CEO, Christy Wyatt, maintains it is the right time for the two to merge. The executive expects Good’s technology to be of great help in boosting BlackBerry Ltd (NASDAQ:BBRY)’s prospects in the ‘Internet of Things.’
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