With an aim of enhancing its cloud and artificial intelligence offerings for healthcare customers, Microsoft announced a $19.7 billion (including all debts) acquisition of Nuance Communications.
It is buying Nuance for $56 per share – a premium of 23% – in an all-cash transaction. The deal is expected to close later this year. It will be Microsoft’s second-largest acquisition after the LinkedIn purchase in 2016 in a $26.2 billion deal.
Microsoft has accelerated its efforts to provide industry-specific cloud offerings to support customers and partners as they respond to disruption and new opportunities. These efforts include the Microsoft Cloud for Healthcare, introduced in 2020, which aims to address the needs of the rapidly transforming healthcare industry. The acquisition of Nuance represents the latest step in Microsoft’s industry-specific cloud strategy.
Microsoft has been working with Nuance on various projects in the past. With healthcare-focused products such as Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting – all built on Microsoft Azure cloud – Nuance has pioneered conversational AI and ambient clinical intelligence for providers.
“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Satya Nadella, CEO, Microsoft.
“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 in Healthcare and Nuance.”
While Nuance’s technologies are deployed in more than three-quarters of US hospitals, it also offers enterprise artificial intelligence and customer engagement technologies – voice, virtual assistants and biometric solutions.
“Over the past three years, we have 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,” added, Mark Benjamin, CEO, Nuance.
“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.”
