(Adds quote, detail from conference call, market reaction and
context on both companies.)
By Allison Martell
TORONTO, Sept 4 (Reuters) - Canada's BlackBerry Ltd BB.TO
said on Friday it will buy rival mobile software provider Good
Technology Corp GDTC.O for $425 million, to boost its ability
to help corporate clients manage smartphones running on
different operating systems.
The cash deal may help BlackBerry, a one-time smartphone
pioneer, win new customers for its services business, a
priority as it shifts focus to device management software for
enterprise customers. More than half the devices running on
Good's systems are Apple Inc AAPL.O products such as the
iPhone.
BlackBerry said it expects to realize about $160 million in
revenue from the acquisition in the first year after the deal
closes, expected by late November. Its Toronto listed shares
were up 1.1 percent at C$7.97 in early trading. ID:nMKWR3cLCa
On a call with analysts and investors, BlackBerry Chief
Executive John Chen was asked about Good's cash burn. He
promised that BlackBerry would remain cash flow positive
overall.
"There obviously will be hard work involved," he said. "But
I do see a lot of opportunity here to drive value for our
shareholders."
Chen said BlackBerry will maintain both company's products
as it develops a unified platform that customers can upgrade to.
He said that a unified product may take a year or two.
Relations between BlackBerry and Silicon Valley-based Good
had long been tense. The companies settled a series of patent
lawsuits in 2004, but as recently as January 2015, BlackBerry
critiqued one of Good's product announcements in a blog post,
annotating the rival company's press release in red ink.
"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.
Wyatt said her company's technology would boost BlackBerry's
ability to manage "Internet of things" devices, supporting
wearable technology such as the Apple Watch and Android-based
competitors.
BlackBerry has recently made acquisitions to expand its
services business, and in July Chen said the company would
likely make more. On Friday, he compared the acquisition of Good
with previously announced deals for Secusmart, Movirtu and
WatchDox.
J.P. Morgan Securities LLC and Bank of America Merrill Lynch (NYSE:BAC)
advised Good on the deal, BlackBerry said.
(With additional reporting by Anannya Pramanick in Bengaluru;
Editing by Anil D'Silva and Chizu Nomiyama)