Satya Nadella, CEO of Microsoft, speaks during the Future Decoded Tech Summit on February 25, 2020 in Bengaluru, India.
Samyukta Lakshmi | Bloomberg | Getty Images
Microsoft is in advanced talks to acquire voice recognition company Nuance Communications, a person familiar with the discussions, CNBC said on Sunday. A transaction could be signed as early as Sunday and announced as early as Monday, the person said.
The plans illustrate Microsoft’s recent efforts to expand through deals. Microsoft last year considered buying the US operations of the video-sharing app TikTok and last month completed the acquisition of video game maker Zenimax, valued at $ 7.5 billion.
Nuance would be more focused on the part of Microsoft’s business that serves corporations and governments. Nuance generates revenue by selling tools to recognize and transcribe speech for doctor visits, customer service calls, and voicemails. The company had net income of $ 7 million on revenue of approximately $ 346 million for the fourth quarter, with revenue declining 4% on an annualized basis. Nuance was founded in 1992 with 7,100 employees in September.
Microsoft first contacted Nuance in December and was ready to pay around $ 56 per share for Nuance. That would bring Nuance a share value of roughly $ 16 billion, a 23% premium over the stock’s closing price of $ 45.58 per share on Friday.
Bloomberg reported on Microsoft’s plans to buy Nuance on Sunday. Microsoft declined to comment. A Nuance representative did not immediately respond to a request for comment.
After purchasing LinkedIn for $ 27 billion in 2016, Nuance would be Microsoft’s second-largest acquisition at $ 16 billion.
By purchasing Nuance, Microsoft’s speech software capabilities can be expanded. Microsoft already has tools that developers can use to enable applications to convert speech into written words, and is integrating speech recognition into its own products such as the Bing search engine and the team communication app.
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