Redmond-based Microsoft Corp. said Monday it has agreed to buy Burlington, Massachusetts-based Nuance Communications Inc. Nuance provides conversational AI and cloud-based ambient clinical intelligence for health care providers.
Under the agreement, Microsoft will acquire Nuance for $56 per share in an all-cash transaction valued at $19.7 billion. This includes Nuance’s net debt, according to a news release.
The deal is anticipated to close this year.
Microsoft introduced its Microsoft Cloud for Healthcare last year to address the needs of the changing and growing health care industry. The Nuance transaction represents the latest step in Microsoft’s industry-specific cloud strategy, the release said.
Nuance products include the Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One for radiology reporting. These products are all clinical speech recognition SaaS offerings built through Microsoft Azure. Nuance’s solutions work seamlessly with core health care systems, including longstanding relationships with Electronic Health Records (EHRs), to alleviate the burden of clinical documentation, according to the release. Nuance is used by more than 55 percent of physicians and 75 percent of radiologists in the U.S., and by 77 percent of U.S. hospitals.
Microsoft’s acquisition of Nuance builds on a partnership between the companies announced in 2019. By augmenting the Microsoft Cloud for Healthcare with Nuance’s solutions, expertise, and relationships with EHR systems providers, Microsoft will be better able to empower health care providers through the power of ambient clinical intelligence and other Microsoft cloud services, the release said. The acquisition will double Microsoft’s total addressable market (TAM) in the health care provider space, bringing its TAM in health care to nearly $500 billion, the release added.
Beyond health care, Nuance provides AI expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies around the world across all industries, the release said. That will marry with Microsoft’s cloud, including Azure, Teams, and Dynamics 365, for future customer engagement and security solutions.