BlackBerry said Friday it is acquiring rival Good Technology for $425 million in cash as it looks to strengthen its position in the core business of helping companies manage their mobile devices.
Good filed for a public stock offering last year, but had yet to move forward with those plans. Instead, it raised $80 million in additional private funding as it weighed whether and when to go public.
Though a significant chunk of change, it’s far less than the $1.5 billion that VMware paid to acquire Good rival AirWatch in 2014.
While BlackBerry’s software already helped securely manage Android and iOS devices, that has been the focus of Good over the last several years. The two companies plan to bring together their separate server software for managing phones and tablets, BlackBerry said in a blog post.
“By acquiring Good, BlackBerry will better solve one of the biggest struggles for CIOs today, especially those in regulated industries: securely managing devices across any platform,” BlackBerry CEO John Chen said in a blog post. “By providing even stronger cross-platform capabilities our customers will not have to compromise on their choice of operating systems, deployment models or any level of privacy and security. Like BlackBerry, Good has a very strong presence in enterprises and governments around the world and, with this transaction, BlackBerry will enhance its sales and distribution capabilities and further grow its enterprise software revenue stream.”
The deal is expected to close by the end of BlackBerry’s third fiscal quarter of 2016 — which ends in November 2015.
J. Gold Associates analyst Jack Gold says the move will help bulk up BlackBerry’s customer base and provides Good with the exit it needed.
“Good was planning a public offering but with its mixed financial results would have had a difficult time going public,” Gold said in a research note. “This path makes them part of an already public company and avoids the scrutiny and difficulty of an IPO.”
However, he cautioned that bringing together the two companies’ product lines could be difficult, especially given public animosity between Chen and Good CEO Christy Wyatt.
“BlackBerry does have experience here with its many recent acquisitions, but Good has much more technology to integrate than previous acquisitions,” he said. “And the culture of the two companies is different, especially since it’s clear that there was no love lost between the top staff (Christy Wyatt spent much time and effort bashing BlackBerry whenever possible, and John Chen responded accordingly).”
Wyatt is set to join BlackBerry in a yet-to-be-determined role.
It’s also unclear whether all 650 of Good’s employees will join BlackBerry. “Staffing is always subject to business conditions, but we recognize that the strength of a company lies in its people and we value the expertise that the Good team will bring to BlackBerry,” BlackBerry said in a statement to Re/code.
This article originally appeared on Recode.net.