Microsoft buys Nuance Communications in a $16 billion deal

Microsoft introduced Monday that it will buy speech recognition firm Nuance Communications for $56 per share, about 23% above its closing worth Friday. The deal is value about $16 billion.

It’s the most recent signal Microsoft is looking for extra progress by acquisitions. The firm can also be reportedly in talks to buy the chat app Discord for about $10 billion. On prime of that, Microsoft made an effort to buy TikTok’s U.S. business last year for about $30 billion earlier than the deal was derailed.

The Nuance acquisition represents Microsoft’s largest acquisition because it purchased LinkedIn for greater than $26 billion in 2016. Last month, Microsoft completed its $7.6 billion acquisition of gaming company Zenimax.

Shares of Nuance had been up 18% Monday morning. Microsoft shares had been barely optimistic.

Nuance could be aligned with the a part of Microsoft’s enterprise that serves companies and governments. Nuance derives income by promoting instruments for recognizing and transcribing speech in physician workplace visits, customer-service calls and voicemails. In its announcement, Microsoft mentioned Nuance’s know-how shall be used to reinforce Microsoft’s cloud merchandise for well being care, which had been launched final 12 months.

Nuance reported $7 million in internet earnings on about $346 million in income in the fourth quarter of 2020, with income declining 4% on an annualized foundation. Nuance was based in 1992, and had 7,100 staff as of September.

Microsoft mentioned Nuance CEO Mark Benjamin will stay on the firm and report back to Scott Guthrie,who’s in cost of Microsoft’s cloud and synthetic intelligence companies.

Nuance has a sturdy repute for its voice recognition know-how, and it has been thought-about an acquisition goal for corporations like Apple, Microsoft and extra for a number of years. Microsoft already has voice recognition constructed into lots of its merchandise, but it surely has not too long ago shut down some products featuring its voice assistant Cortana.

This story is creating, examine again for updates.

–CNBC’s Alex Sherman and Jordan Novet contributed to this report.