Highlights:
- Microsoft is looking to increase its growth acquisitions and also plans to buy chat app Discord for $10 billion.
- Nuance reported dollar 7 million in net income where about dollar 346 million in revenue in the fourth quarter of 2020.
- Nuance takes pride in having 700 employees in India based workstation.
Introduction:
Microsoft announced on Monday that it will buy a speech recognition company called Nuance Communications for $56 per share. This value is almost 23% more than its closing price on Friday. The value of the deal is worth $16 billion and about $19 billion which includes the debt.
It is a clear sign that Microsoft is looking for increased growth acquisitions. Reportedly the company has plans to buy the chat app Discord for $10 billion. On top of that Microsoft also attempted to buy TikTok’s US business for about $30 billion last year. But the deal never happened.
The Nuance acquisition is seemingly Microsoft’s largest acquisition since it acquired LinkedIn for more than $26 billion in 2016. Last month Microsoft acquired a gaming company called Zenimax at a value of $7.6 billion. Share of Nuance ended the trading day up 15.95% on Monday. Microsoft shares very slightly up.
Nuance will align with the part of Microsoft’s business that serves and works with businesses and governments. Nuance earns revenue by selling tools to recognise and transcribe speech in doctor office visits, customer service calls, and voicemails. Microsoft said in its announcement that Nuance’s Technology will augment Microsoft’s cloud products for healthcare that were launched last year.
Statement from Microsoft CEO Satya Nadella:
Microsoft CEO Satya Nadella highlighted Nuance’s healthcare tools which work as the purpose behind the acquisition. “We’ve seen a massive acceleration of digital transformation… healthcare in particular,” Nadella said. “When you think about the provider market… digital tech is going to be the key.”
Tweet from Satya Nadella:
“AI is technology’s most important priority, and healthcare is its most urgent application. Together with @NuanceInc, we will put advanced AI solutions into the hands of professionals to drive better decision-making and create more meaningful connections.”
Nuance reported dollar 7 million in net income where about dollar 346 million in revenue in the fourth quarter of 2020. The revenue declined by 4% on the yearly basis.
Beginning of Nuance Communications:
Nuance was founded in 1992 and registered 7100 employees as of September. Microsoft said Nuance CEO Mark Benjamin will stay in the company and report to Scott Guthrie who works as incharge of of Microsoft’s cloud and artificial intelligence business.
Nuance comes with a strong reputation for the voice recognition technology it has given. This is why it is being considered an acquisition target for companies like Apple and Microsoft and other tech giants.
Microsoft provides voice recognition in many of its products. But recently shut down some of its products that featured its voice assistant Cortana.
