Microsoft said on Monday it would buy artificial intelligence and speech technology firm Nuance Communications for about $16 billion (€13.43 billion) in cash, as it builds out its cloud strategy for healthcare.
The deal comes as both companies, which partnered in 2019 to automate clinical administrative work such as documentation, gain from a boom in telehealth services with medical consultations shifting online due to the Covid-19 pandemic.
“Nuance provides the AI layer at the healthcare point of delivery,” Microsoft chief executive Satya Nadella said in a statement, adding “AI is technology’s most important priority, and healthcare is its most urgent application.”
Microsoft’s offer of $56 per share represents a premium of 22.86 per cent to Nuance’s last close. Shares of Nuance rose nearly 23 per cent in pre-market trading.
Siri’s launch
Nuance helped launch Apple’s assistant, Siri, and also makes software for businesses including the automotive sector.
Mark Benjamin will remain the chief executive officer of Nuance and will report to Scott Guthrie, executive vice-president of Cloud & AI at Microsoft, the company said.
The deal follows Microsoft’s recent acquisition of gaming company ZeniMax Media, and reports of buyout interests in messaging platform Discord, which also allows live audio events.
A deal for Nuance would be Microsoft’s second-biggest, after its $26.2 billion acquisition of LinkedIn in 2016. Including net debt, the all-cash transaction is valued at $19.7 billion.
Goldman Sachs is the financial adviser to Microsoft, while Evercore advised Nuance. – Reuters
