Sign in Subscribe
Information technology services industry

Microsoft Acquires Nuance Communications for $19.7 Billion

Strategic Insights

— 1 min read

Microsoft has entered into a definitive agreement to acquire Nuance Communications, Inc. for $56.00 per share in an all-cash transaction valued at $19.7 billion, inclusive of Nuance's net debt. Nuance is a trusted cloud and AI software leader representing decades of accumulated healthcare and enterprise AI experience. The acquisition will combine solutions and expertise to deliver new cloud and AI capabilities across healthcare and other industries, and is expected to close by the end of this calendar year.

Key Takeaways:

  • Microsoft has accelerated its efforts to provide industry-specific cloud offerings to support customers and partners as they respond to disruption and new opportunities.
  • Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI.
  • The acquisition will combine Microsoft's cloud services with Nuance's conversational AI and cloud-based ambient clinical intelligence solutions.
  • Nuance's solutions are currently used by more than 55% of physicians and 75% of radiologists in the U.S., and used in 77% of U.S. hospitals.
  • The acquisition will double Microsoft's total addressable market (TAM) in the healthcare provider space, bringing the company's TAM in healthcare to nearly $500 billion.
  • Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.
  • The deal is subject to approval by Nuance's shareholders, the satisfaction of certain regulatory approvals, and other customary closing conditions.

Statistics:

  • $56.00: the price per share that Microsoft will pay for Nuance.
  • $19.7 billion: the total value of the acquisition, inclusive of Nuance's net debt.
  • 55%: the percentage of physicians using Nuance's solutions.
  • 75%: the percentage of radiologists using Nuance's solutions.
  • 77%: the percentage of U.S. hospitals using Nuance's solutions.
  • $500 billion: the estimated total addressable market (TAM) in healthcare for Microsoft.

Sources:

  • Microsoft Corp Form 8-K (EDGAR Online via COMTEX)
  • Microsoft Corporate Website (https://news.microsoft.com)
  • Nuance Communications, Inc. Corporate Website (http://investors.nuance.com)
  • Press release announcing the acquisition of Nuance Communications, Inc. by Microsoft Corp (dated April 12, 2021)

Read more