Microsoft, on an accelerated progress push, is shopping for speech recognition firm Nuance in a deal value about USD 16 billion.
Microsoft pays USD 56 per share in money. That is a 23 % premium to Nuance’s Friday closing worth. The businesses worth the transaction together with debt at USD 19.7 billion.
Shares of Burlington, Massachusetts-based Nuance surged greater than 17 % in Monday morning buying and selling.
Microsoft’s acquisition of Nuance comes after the businesses fashioned a partnership in 2019. The Redmond, Washington, firm stated that the deal will double its whole addressable market within the well being care supplier trade, bringing its whole addressable market in well being care to almost USD 500 billion.
Nuance’s merchandise embrace the Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One for radiology reporting, all scientific speech recognition SaaS choices constructed on Microsoft Azure. The corporate’s merchandise are at the moment utilized by greater than 55 % of physicians and 75 % of radiologists within the US, and by 77 % of US Hospitals. Its well being care cloud income skilled 37 % year-over-year progress in fiscal 2020.
AI is expertise’s most essential precedence, and healthcare is its most pressing utility, Microsoft CEO Satya Nadella stated in an announcement.
Except for well being care, Nuance supplies AI experience and buyer engagement options throughout interactive voice response, digital assistants, and digital and biometric options to firms in all industries. This can be part of with Microsoft’s cloud, together with Azure, Groups, and Dynamics 365, to ship next-generation buyer engagement and safety options.
The transaction is Microsoft’s second-largest deal following its USD 26 billion buy of LinkedIn in 2016. Final September, it purchased online game maker ZeniMax for USD 7.5 billion.
That is the best acquisition on the proper time with Microsoft doubling down on its well being care initiatives over the approaching years, Wedbush analyst Daniel Ives wrote in a observe to purchasers.
Ives stated the transaction suits effectively into Microsoft’s well being care portfolio and comes at a time that hospitals and medical doctors are embracing next-generation AI capabilities.
Mark Benjamin will proceed as Nuance CEO.
The transaction is anticipated to shut this 12 months. It nonetheless wants approval from Nuance shareholders.