Microsoft announced on Wednesday that it will buy Nuance Communications, a U.S. artificial intelligence (AI) and speech recognition technology company, for about $16 billion in cash.
In 2019, the two companies partnered to automate paperwork such as document creation at medical institutions. As telemedicine spreads in response to the spread of covid-19, Microsoft will strengthen its healthcare cloud operations. “AI is a top priority technology, and the healthcare sector should put AI to practical use the fastest,” said Nadella, Microsoft’s chief executive.
The deal valued at $56 per share, 22.00 at Nuance’s 9-day closing price. 86%. The stock price was about 16% higher on this day. I was at $85.
Nuance is headquartered in Burlington, Massachusetts. It is known for providing technology used in Apple’s Siri voice assistant feature.
In the past, the company provided speech recognition technology to various industries, but it has separated and sold less profitable businesses and is now focusing on healthcare and corporate AI.
With operations in 28 countries, two-thirds of the $1.5 billion in revenue in FISCAL 2020 was earned in the healthcare sector. We provide services that utilize speech recognition technology at the time of inquiry. The U.S. hospital use rate is 77%.
Forrester analyst J. P． Gounder noted that Nuance’s healthcare strengths will further connect healthcare customers with Microsoft’s cloud and AI-related services.
Microsoft’s acquisition is $19.7 billion, including net debt. Microsoft’s acquisition is the second-largest acquisition after linked-in ($26.2 billion) in 2016.