BlackBerry to Buy Crisis-Communications Software Firm AtHoc

BlackBerry Ltd. said Wednesday it agreed to buy closely held software provider AtHoc, the smartphone maker's latest niche acquisition in its bid to reignite revenue from sales of mobile software and security offerings to government and corporate customers.

The deal is the Canadian smartphone maker's fourth acquisition since September. All either focus on helping companies reduce their employee mobile device costs or add additional security to mobile networks.

Financial terms of the AtHoc purchase weren't disclosed.

AtHoc's software works across mobile operating systems and allows users to communicate in real time during a crisis situation. The San Manteo, California-based company's customers include the U.S. Department of Defense and Homeland Security.

"AtHoc's technology and expertise will play a key role as BlackBerry works to connect and secure a broad range of endpoints," BlackBerry Chief Executive John Chen said in a release.

BlackBerry is betting on the sales of mobile security and productivity software, and smartphones aimed at professionals, to fuel its turnaround. It is targeting software sales of $500 million for fiscal 2016.

Acquisitions have always been part of BlackBerry's strategy. But deals are becoming increasingly important to its efforts as sales of the company's latest software used to manage mobile devices on a corporate network struggle to gain traction.

BlackBerry generated a profit of $68 million in its fiscal first quarter, largely due to cost-cutting. Revenue fell 32%. The company's software sales rose year-over-year, but some analysts were disappointed with the increase because it also included revenue from the licensing of technology patents. BlackBerry had previously not grouped technology licensing revenue with software sales.

The company had also aimed to generate another $100 million in fiscal 2016 from its BBM messaging service. But in another sign of its struggles, the company disclosed in a regulatory filing last month that it no longer expects to reach that BBM revenue target this year fiscal year due to lower-than-expected growth. It didn't provide updated BBM revenue guidance.

BlackBerry signaled in its release that AtHoc's technology could help it generate revenue from BBM. The company may incorporate the software with its BBM service to allow users to enable live video feeds or transmit messages in real time.

Write to Ben Dummett at [e-mail]

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