Nuance has a high reputation for its voice recognition technology and has been considered a multi-year acquisition option for companies including Apple, Microsoft, and more.
Microsoft revealed Monday it would buy speech recognition company Nuance Communications for $16 billion, the tech giant’s biggest acquisition since it acquired LinkedIn in 2016 for over $26 billion.
The deal is Microsoft’s new search for more growth through acquisitions. The company is also currently in negotiations to buy the Discord chat app for about $10bn and attempted last year to buy TikTok’s U.S. business for about $30bn until the deal was derailed. Microsoft purchased Zenimax for $7.6 billion last month.
Nuance Shares
Nuance’s shares were up nearly 23 percent in Monday’s premarket trade, reflecting about the same premium Microsoft expects to bid at Friday’s closing price. After that, trading was suspended on stocks, and trading is expected to resume at about 9 a.m. ET. Microsoft shares were negative.
Nuance will fit with Microsoft’s market portion serving companies and governments. Nuance receives revenue from selling software to recognize and transcribe speech in medical visits, customer service calls, and voicemails. In Monday’s announcement, Microsoft said Nuance’s technology would be used to expand Microsoft’s healthcare cloud products, introduced last year.
DEAL
The business posted $7 million in net income on sales of about $346 million in the fourth quarter of 2020, with annual revenue declining 4 percent. Created in 1992, Nuance had 7,100 employees in September 2020.
Microsoft said Nuance’s CEO, Mark Benjamin, will stay at the company and report to Scott Guthrie, Microsoft’s cloud and artificial intelligence business executive.
Nuance has a high reputation for its voice recognition technology and has been considered a multi-year acquisition option for companies including Apple, Microsoft and more. Microsoft already has voice recognition integrated into many of its products, but recently shut down several products featuring Cortana’s voice assistant.
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