Microsoft has paid $19.7 billion in all-cash to acquire speech recognition firm Nuance Communications.
The tech giant paid $56 per share, with the full transaction including Nuance’s debt. Microsoft plans to use Nuance’s artificial intelligence solutions to enhance the offerings of its Microsoft Cloud for Healthcare, which has a range of capabilities for managing healthcare data at scale.
“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,” said Satya Nadella, CEO of Microsoft, in a statement.
Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting. All are built on Microsoft Azure and are designed to recognize and transcribe speech in doctor office visits, customer service calls, and voicemails. They can seamlessly integrate with electronic health records to reduce clinical documentation and help providers create better patient experiences, and will be used alongside Microsoft’s Azure, Teams and Dynamics 365 solutions to support customer engagement and enhance security.
In addition, the acquisition will double Microsoft’s total addressable market in the healthcare provider space by bringing it to nearly $500 billion.
The deal has been approved unanimously by both companies’ boards of directors. Mark Benjamin will remain CEO of Nuance and report to Scott Guthrie, executive vice president of Cloud and AI at Microsoft.
Benjamin says the deal reflects growing demand in healthcare and enterprise AI markets for advanced conversational AI and ambient solutions. “To seize this opportunity, we need the right platform to bring focus and global scale to our customers and partners to enable more personal, affordable and effective connections to people and care. The path forward is clearly with Microsoft, who brings intelligent cloud-based services at scale and who shares our passion for the ways technology can make a difference.”
While Microsoft already has built-in voice recognition for many of its technologies, it shut down the app this month for its voice assistant Cortana for IOS and Android in order to end support for Cortana across multiple devices, reported The Verge
The deal is expected to be completed by the end of the calendar year 2021.
Microsoft referred inquiries to the press release it put out on the transaction. Nuance did not respond for comment.