Microsoft announced in a blog post that it has agreed to buy Nuance Communications, an AI and speech-recognition company, for $19.7 billion.
Microsoft will use the deal to offer “new cloud and AI technologies across healthcare and other sectors, as it extends cloud solutions for healthcare customers.” According to the firm.
“With this purchase, our innovations will be fully integrated into the physician-patient loop, which is at the heart of all healthcare delivery.
Microsoft CEO Satya Nadella said, “The acquisition will also strengthen our leadership in cross-industry enterprise AI and biometric security.”
Microsoft’s bid of $56 per share represents a 22.86 percent premium over Nuance’s Friday closing price. On Monday, the stock rose 16 percent to $52.85 per share.
Nuance, the company best known for pioneering speech technology and assisting in the launch of Apple Inc’s virtual assistant, Siri, has undergone strategic reviews led by CEO Mark Benjamin.
Nuance announced $1.5 billion in revenue in fiscal year 2020, with two-thirds of it coming from healthcare. The company has operations in 28 countries.
Nuance will be Microsoft’s second-largest acquisition since its $26.2 billion purchase of LinkedIn in 2016. The all-cash deal is estimated at $19.7 billion, including net debt.
Benjamin will continue to lead Nuance and report to Scott Guthrie, Microsoft’s executive vice president of cloud and AI, according to the company.
The partnership between Nuance and Microsoft began in 2019 with the aim of automating clinical administrative tasks such as documentation. It demonstrates Microsoft’s desire to broaden its leadership in an industry where digital transformation has accelerated as a result of the pandemic. Healthcare organizations have increased their technological investments in order to maximize sustainability and digital health services.