US company Microsoft is signing the second largest purchase agreement in its history. Microsoft will buy Nuance Communications for $19.7 billion. Microsoft’s plan to buy Apple’s voice recognition software company Nuance is considered the most expensive purchase since the 2016 LinkedIn purchase.
The acquisition of Nuance Communications will enhance the company’s software and artificial intelligence capabilities for healthcare organizations, Microsoft said. Recently, during the coronavirus lockdown, practices such as telehealth and remote doctor visits have been on the rise. Such a trend is expected to continue even after the epidemic subsides.
Satya Nadella, CEO of Microsoft, said in a statement: “Artificial intelligence is one of the most important priorities of technology and its most urgent use is in healthcare.”
It is said that when Microsoft buys Nuance, an agreement will be reached to repay the outstanding loan of the company and the agreement will be completed by the year 2021.
What is Nuance?
Nuance Communications Company was founded in 1992 in Massachusetts, USA. The company has branches in 28 different countries and has more than 1600 employees.
The company is considered a pioneer in the development of speech recognition technology under Artificial Intelligence. Lately, Nuance has been focusing on providing software to the healthcare industry. It can automate radiology reports and prepare patient reports by speaking to doctors.
Nadella, Microsoft’s CEO, says more than 80 percent of US hospitals are now customers of Nuance. Therefore, Nuance’s purchase is expected to help in the dramatic expansion of Microsoft’s potential market in the healthcare industry.
Nuance officials also say that the merger with Microsoft will expand the company’s cloud-based services and take advantage of Microsoft’s global presence.
It is to be recalled that a partnership agreement was signed between Microsoft and Nuance in 2019 to automate medical administrative tasks. It is said that the last purchase and sale agreement was developed from the same agreement.
What is in the sale agreement?
Microsoft will have to pay $56 per share for Nuance to merge with Nuance. That’s 23 percent more than Nuance’s current share price.
News of a buy-sell deal between Microsoft and Nuance has made public that Nuance’s share price has risen, but Microsoft’s share price has fallen slightly. The purchase and sale plan has been approved by the boards of both companies.