Thursday, May 26, 2022

Microsoft buys Nuance for $19.7 billion

Microsoft has purchased Nuance Communications, an AI and healthcare software provider, for US$19.7 billion, the biggest acquisition since it bought LinkedIn for US$26.2 billion in 2016.

The all-cash deal announced on April 12 included payments of US$56.00 per share, a 23 per cent premium over Nuance’s closing price on Friday. With the transaction, Microsoft will also take on all of Nuance’s net debt.

Microsoft hopes to expand its healthcare and AI technology portfolio with the purchase, including bolstering the Microsoft Cloud for Healthcare.

Nuance’s productivity solutions, which includes its Dragon enterprise software suite, align with Microsoft’s other verticals as well. The Dragon speech recognition software, as well as the Dragon Legal and Professional productivity suite, will feed well into Microsoft’s existing offerings in its AI and productivity space.

Microsoft said in an April 12 news release that the acquisition will double Microsoft’s total addressable market in the healthcare provider space, bringing it up to $500 billion.

The company also aims to converge Nuance’s biometric virtual assistant products with Teams, Azure, and Dynamics 365 to create new solutions.

The deal is expected to close at the end of this calendar year. Once completed, Nuance’s financials will be reported as a part of Microsoft’s Intelligent Cloud segment.

Mark Benjamin will remain as the CEO of Nuance. He’ll be reporting to Scott Guthrie, executive vice president of cloud and AI at Microsoft.

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Jim Love, Chief Content Officer, IT World Canada
Tom Li
Tom Li
Telecommunication and consumer hardware are Tom's main beats at IT World Canada. He loves to talk about Canada's network infrastructure, semiconductor products, and of course, anything hot and new in the consumer technology space. You'll also occasionally see his name appended to articles on cloud, security, and SaaS-related news. If you're ever up for a lengthy discussion about the nuances of each of the above sectors or have an upcoming product that people will love, feel free to drop him a line at tli@itwc.ca.

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