Why did BlackBerry make a few acquisitions last quarter?

Puneet Sikka - Author

Aug. 18 2020, Updated 5:24 a.m. ET

BlackBerry acquired Secusmart and Movirtu last quarter

Earlier in this series, we discussed BlackBerry’s (BBRY) software and service segments and how the company plans to grow these businesses. At the same time, BlackBerry is looking to grow its business inorganically. The company made a couple of strategic acquisitions last quarter. BlackBerry acquired a German company, Secusmart, that will help BlackBerry enhance its devices’ security in enterprises. Until now, BlackBerry had built-in security measures for BBM messages and enterprise emails. But Secusmart will help BlackBerry enhance its security from data and messaging to voice and text communication as well.

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Enterprise security is becoming a crowded market, with Apple (AAPL) partnering with IBM (IBM) to provide better service to enterprises. Earlier this year, VMWare (VMW) acquired AirWatch for $1.18 billion to enhance its enterprise mobile management and security solutions. More recently, Google (GOOG)(GOOGL) acquired Divide, which used to focus on the security of Android devices in enterprises.

BlackBerry also acquired a UK-based company, Movirtu, during the quarter. Movirtu provides a virtual SIM solution that lets users have both their corporate and personal numbers on a single device. Earlier in this series, we discussed the bring-your-own-device or BYOD concept catching on with enterprises. The Movirtu acquisition should help BlackBerry leverage this concept, as employees will have the flexibility of bringing their personal devices to their workplaces.

BlackBerry’s maintaining its cash balance for strategic acquisitions

BlackBerry has been making strategic but small acquisitions to conserve its cash balance. As the chart above shows, BlackBerry’s cash and cash equivalents were $3.1 billion last quarter. BlackBerry mentioned that it only used $36 million in cash in fiscal 2Q15—down from $255 million in 1Q15. The company has been consciously spending less on operating expenses and capital expenditures.

During the second quarter, BlackBerry completed its Canadian real estate sale and other smaller asset sales to maintain its cash balance.


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