Published On: Tue, Apr 13th, 2021

Microsoft to acquire Nuance Communications for $19.7bn

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Microsoft acquisition of : Tech giant Microsoft has signed an all-cash deal worth $56 per share or $19.7 billion to acquire Nuance Communications, a cloud and AI software company.

The consideration is inclusive of Nuance Communications’ net debt.

Microsoft said that the acquisition expedites its industry cloud strategy for the healthcare sector.

The tech giant said that it has fast tracked its efforts to offer industry-specific cloud offerings for supporting partners and customers in their response to disruption and new opportunities. Part of these efforts is the Microsoft Cloud for Healthcare, which was launched in 2020 for addressing the comprehensive requirements of the quickly transforming and expanding healthcare industry.

Nuance Communications’ present CEO Mark Benjamin will continue in the role and will report to Microsoft Cloud & AI executive vice president Scott Guthrie.

The company has been catering to healthcare providers with conversational AI and cloud-based ambient clinical intelligence. Its products are the Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One.

Its solutions are said to help in easing the burden of clinical documentation and helps providers to provide better patient experiences.

Currently, Nuance Communications’ solutions are claimed to be used by over 55% of physicians and 75% of radiologists in the US, and used in 77% of hospitals across the US.

Microsoft acquisition of Nuance Communications follows the two companies’ partnership that was announced in October 2019, aimed at transforming the doctor-patient experience.

The tech giant said that by supplementing the Microsoft Cloud for Healthcare with Nuance Communications’ solutions, and also the latter’s expertise and relationships with EHR systems providers, it can better empower healthcare providers with ambient clinical intelligence and other Microsoft cloud services.

The deal will double the total addressable market (TAM) of Microsoft in the healthcare provider space to about $500 billion.

Commenting on Microsoft acquisition of Nuance Communications, -CEO of Microsoft, said: “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.”

Microsoft acquisition of Nuance Communications

Microsoft acquisition of Nuance Communications. Photo courtesy of Nuance Communications,

Apart from catering to healthcare, Nuance Communications offers AI expertise and customer engagement solutions across virtual assistants, interactive voice response (IVR), and digital and biometric solutions to firms spanning all industries.

Mark Benjamin – CEO of Nuance Communications, commenting on Microsoft acquisition of Nuance Communications, said: “Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerated demand 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. At the same time, this combination offers a critical opportunity to deliver meaningful and certain value to our shareholders who have driven and supported us on this journey.”

Microsoft acquisition of Nuance Communications is expected to close by the year end, subject to approval by the latter’s shareholders, regulatory approvals, and other customary closing conditions.

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