Microsoft’s $19.7 Bn. all-cash acquisition of Nuance Communications indicates how important AI-driven healthcare will be in the near future

Microsoft Acquistion Nuance Communications
Microsoft to acquire Nuance for $19.7 Bn. all-cash deal. Pic credit: kamleshverm/Pixabay

Microsoft has announced it is acquiring Nuance Communications in an all-cash transaction. The acquisition will reportedly cost the Windows 10 maker about $19.7 Billion.

Microsoft has confirmed it is acquiring Nuance Communications for $19.7 Billion. The all-cash deal involves Nuance’s net debt and its shares.

Nuance Communications and all its products in the digital healthcare sector now in Microsoft’s bouquet:

Nuance Communications and its entire product portfolio, which mainly revolves around AI-driven digital healthcare, will now be a part of Microsoft. The $19.7 Billion deal values each share at $56, a 23 percent premium over their closing price on Friday, April 9.

Mark Benjamin, the CEO of Nuance Communications, will retain his position and will report to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.

Microsoft plans to close this deal within the current year, and board members have already approved the same.

Speaking about the acquisition, Benjamin said: “Over the past three years, Nuance has 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”.

“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 a meaningful and certain value to our shareholders who have driven and supported us on this journey”.

Incidentally, Benjamin appears to have been referring to a partnership between the two companies back in 2019. At present, all of Nuance’s digital products reside and function on Microsoft Azure cloud services.

What does Microsoft gain from acquiring Nuance for $19.7 Billion?

The deal amount is quite big. Moreover, the acquisition was executed in an all-cash deal. Considering the current situation, both of the aspects are quite significant.

However, Nuance Communications is a big and emerging player in the AI-driven digital healthcare business. Microsoft already powers Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One.

All of these products belong to Nuance, and now Microsoft has successfully acquired them. This means the latter clearly wants to bet big on the virtual doctor-patient experience.

About 55 percent of physicians and 75 percent of radiologists actively rely on Nuance’s healthcare-focused products. Moreover, Nuance also offers solutions in the field of AI and customer engagement. Interestingly, Apple’s Siri virtual assistant regularly draws information from Nuance’s products.

Given the scope of Nuance Communications, Microsoft now gets a firm and large foothold in the healthcare sector. Moreover, with Azure already powering Nuance’s products, integration, assimilation, and other aspects shouldn’t take long for Microsoft.

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