Microsoft is in advanced talks to buy Nuance Communications. Microsoft will offer about 16 billion dollars for an artificial intelligence company applied to the health sector.
According to market sources, the offer being negotiated is $56 for each Nuance Communications share, which is a 23% premium to the closing of its titles last Friday.
Microsoft and Nuance Communications have been collaborating since 2019. They have been developing technology that enables physicians to record voice conversations at patient examinations and incorporate critical aspects into their records without taking notes.
According to Anurag Rana, an analyst at Bloomberg Intelligence, this can help Microsoft accelerate the healthcare industry’s digitization, which has lagged other sectors.
Nuance would be the biggest purchase for Microsoft after its Linkedin acquisition
Experts believe that telehealth would see the most incredible benefits.
If the procedure is completed, Bill Gates’ company will make the most significant purchase since December 2016. Five years ago, it announced the acquisition of the professional social network Linkedin.
Microsoft has been very active in the healthcare sector, trying to market its cloud applications to hospitals and healthcare professionals. And Nuance Communications is a perfect fit for this strategy.
Dan Ives, an analyst at Wedbush broker, stated that the company represents a unique healthcare asset for Microsoft, so that the deal would be a trophy.
Shares of Nuance Communications increased by 3.4% this year.
The Artificial Intelligence software develops parsing language and predicting medical needs. Nuance and Microsoft may advance technology that searches for particular words in health records to make better suggestions to medical personal for patient care.
Nuance, whose products include Dragon speech recognition software, lost $217 million the previous year. However, it had a net income of $91 million on revenue of $1.48 billion for its fiscal year ending September 30.
On the other hand, Microsoft has been increasingly focused on the healthcare sector. In May, the company uncovered an industry-specific cloud software package. The software maker hired executives with medical experience and investigated machine learning and artificial intelligence tools for areas including clinical trials. Microsoft sees AI as a critical driver of future sales of cloud services. Besides, the company faces strong competition with rivals such as Google and Amazon in the AI space. So, the acquisition could be a significant boost for Microsoft.
Coincidentally, one of Microsoft’s Boston area offices is located right next to Nuance headquarters.
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