Microsoft is in the process of negotiating for acquiring a new communications company, Nuance Communications, an acquaintance told CNBC on Sunday.
The deal could be signed on Sunday and announced immediately on Monday, the source said. This is exactly what we have seen. The deal is completed and announced now.
The plans illustrate Microsoft’s recent efforts to expand through deals. Microsoft considered buying the U.S. operations of video-sharing app TikTok last year, and last month it completed the $7.5 billion acquisition of video game maker Zenimax.
Microsoft-Nuance Synergy
Nuance will be closely associated with the Microsoft business segment.
Nuance earns money by selling tools for recognizing and transcribing speech in doctor’s visits, customer-service calls and voicemails. The company reported $7 million in net income on about $346 million in revenue in the fourth quarter, with revenue declining 4% on an annualized basis.
Nuance was founded in 1992, with 7,100 employees as of September.
Nuance’s Total Value
Microsoft first spoke to Nuance in December, the source said, and is willing to pay about $ 56 per share of Nuance, the source said. That would give Nuance a net worth of about $ 16 billion, representing a 23% premium over Friday’s closing stock of $ 45.58 per share.
Bloomberg reported on Microsoft’s plans to buy Nuance earlier this Sunday. Microsoft declined to comment. The Nuance representative did not immediately respond to a request for comment.
At $ 19 billion, Nuance has become Microsoft’s second largest acquisition, following the purchase of LinkedIn in 2016.
Buying Nuance could expand Microsoft’s capabilities in voice software. Microsoft already has tools that developers can use to enable applications to transcribe speech into written words, and it incorporates speech recognition into its own products, such as the Bing search engine and the Teams communication app.
Synopsis
- Microsoft first approached Nuance in December, the person said, and is willing to pay about $56 per share for Nuance, the person said.
- That would give Nuance an equity value of about $16 billion, representing a 23% premium over the stock’s Friday closing price of $45.58 per share.
- At $16 billion, Nuance would be Microsoft’s second largest acquisition, after the $27 billion purchase of LinkedIn in 2016.
