Microsoft announced today that the company will acquire Nuance Communications, a trusted cloud and AI software leader in the healthcare and enterprise AI space, for $56 per share, about 23% above its closing price on Friday, April 9, 21. The total deal has an all-in value of $19.7 billion, inclusive of Nuance’s net debt.
This will be one Microsoft’s second-largest acquisition following LinkedIn for $26.2B in 2017.
Nuance solutions are used by more than 55% of physicians and 75% of radiologists in the US and 77% of US hospitals. Nuance has a strong presence with its voice recognition technology and had been considered for acquisition from companies like Apple, Microsoft and others over the last few years. With their AI expertise and customer engagement solutions for Interactive Voice Response (IVR), virtual assistance and digital and biometric solutions, the technology has the capacity to impact and be utilized for global companies across all industries.
In its fourth quarter of 2020, Nuance reported about $346 in revenue, with EPS and Renenue exceeding range expectations. Founded in 1992, Nuance has over 7,000 employees as of September 2020.
Satya Nadella, CEO, Microsoft, said in the initial announcement: “Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI. AI is technology’s most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance.”
The deal showcases Microsoft’s strategy towards industry-specific cloud offerings and this deal will fall into the Microsoft Cloud for Healthcare effort, established in 2020 intended to counteract needs within the healthcare industry.
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