Microsoft said on Monday that it would buy Nuance Communications.
Nuance is an American multinational computer software technology corporation, headquartered in Burlington, Massachusetts, on the outskirts of Boston, that provides speech recognition, and artificial intelligence.
Nuance is also known for providing the speech recognition software behind Siri, Apple’s virtual assistant. In recent years, however, it has focused on creating and selling software focused on the medical field.
Microsoft agreed to buy for about $16 billion, which will help to expand its health care technology services. However, the two companies have already worked together on ways to automate the process of transcribing doctors’ conversations with patients and integrating that information into patients’ medical records.
In acquiring Nuance, whose products include Dragon medical transcription software, Microsoft is hoping to bolster its offerings for the fast-growing field of medical computing. Microsoft said the acquisition doubled the size of the healthcare market where it competes, to almost $500 billion.
Under the terms of the deal, Microsoft will pay $56 a share in cash, up 23 percent from Nuance’s closing price on Friday. Including assumed debt, the transaction values Nuance at about $19.7 billion. The deal is Microsoft’s biggest takeover since its 2015 acquisition of LinkedIn for $26.2 billion.
“Nuance provides the A.I. layer at the health care point of delivery and is a pioneer in the real-world application of enterprise A.I. Purchasing the firm will dramatically expand Microsoft’s potential market in the health care industry.”Satya Nadella – CEO Microsoft
Nuance: known as speech recognition pioneer has nearly 80% of US Hospitals as costumers. While its executives said joining hands with Microsoft will deepen its could based offerings and allow it to tap in Microsoft’s global costumer base.
Dan Ives – Wedbush Securities Analyst
“This deal is a strategic no brainer in our opinion and fits like a glove into its healthcare at a time in which hospitals and doctors are embracing next-generation AI capabilities from thought leaders such as Nuance”.
Microsoft is to pay $56 per share to bring the firm under its own roof that price is about 23% higher than where Nuance shares were trading on Friday. Shares in Microsoft were flat following the announcement, while Nuance gained more than 16%. The boards of both companies have approved the transaction.
Microsoft owner Bill Gates is focusing more on Health Care Technology and by combining AI in the field of health will be a revolutionary move that will expand worldwide.
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