OTTAWA — As element of its shift away from phones toward software, BlackBerry announced on Friday that it would buy a rival, Good Technology, for $425 million. Nonetheless, BlackBerry is portion of Good’s licensing income resulting in some of Good’s revenue eliminated upon closing the acquisition. Great, with its client base of six,200 organizations, has been a leader in EMM for really some time, as evidenced by Gartner’s rating of Good as a Leader” in its magic quadrant for EMM in June 2015 (versus a Niche Player” rating for BlackBerry).
Primarily based on management’s F2016 development expectations for the core EMM enterprise, we believe BlackBerry faces the difficult job of promoting not just EMM subscriptions but have to also upsell increasing amounts of VAS and close extra technologies licensing bargains to meet its F2016 software-associated sales target. We like the deal and view it as a good strategic fit for BlackBerry, as Very good was 1 of the firm’s major competitors in the enterprise mobility management software program space.
Great is specifically effectively positioned as an EMM provider on Apple’s iOS platform, whereas BlackBerry seems to have had some challenges in deploying its software program on other operating systems. Hunting at vertical customers, Great seems to be well positioned with enterprise consumers in defense, whilst BlackBerry’s strength in government deployments could lead to cross-selling opportunities for Good’s goods.
The acquisition supplies notable expense synergies, which we believe will let BBRY to be cash flow/earnings accretive in the first year. We feel the Very good delivers a steady revenue stream and exposure to numerous operating systems, as we note more than 80% of revenue is recurring and 64% of activations are from iOS devices. Strategically, with Good Technology, BlackBerry will now have a much more extensive platform to safe mobile devices across any platform – iOS, Google’s ( GOOGL ) Android, Microsoft’s ( MSFT ) Windows, and Blackberry. With Great, BlackBerry will also expand its global enterprise and government consumer base.
Excellent serves more than six,200 organizations, with specific strength in Government, A&D, healthcare, and commercial banks. Good with its Excellent Dynamics platform will also bring access to over 2000 independent application vendor (ISV) apps. This is the second acquisition for BlackBerry this summer time that impacts government buyers.