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Nuance Communications Shares Rise 16% on $19.7 Billion Buyout Bid by Microsoft

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Nuance Communications shares reached a new 52-week high after the company reported that it agreed to be acquired by Microsoft in an all cash transaction for $56 per share.

Nuance Communications Inc. (NUAN:NASDAQ) and Microsoft Corp. (MSFT:NASDAQ) today announced that "the two firms have entered into a definitive agreement under which Microsoft will acquire Nuance for $56.00 per share, implying a 23% premium to the closing price of Nuance on Friday, April 9, in an all-cash transaction valued at $19.7 billion, inclusive of Nuance's net debt."

The announcement stated that Nuance Communications is a "trusted cloud and AI software leader representing decades of accumulated healthcare and enterprise AI experience." The company's products include "the Dragon Ambient eXperience, Dragon Medical One and PowerScribe One for radiology reporting, all leading clinical speech recognition SaaS offerings built on Microsoft Azure."

It was noted in the announcement that Microsoft (MS) introduced its Microsoft Cloud for Healthcare in 2020, which is focused on addressing the rapidly changing and extensive needs of the healthcare industry and that the acquisition of Nuance fits right in-line with its industry-specific cloud strategy. By combining operations and technology with those of Nuance, Microsoft "will be better able to empower healthcare providers through the power of ambient clinical intelligence and other Microsoft cloud services."

Microsoft's CEO Satya Nadella commented, "Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI...AI is technology's most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud in Healthcare and Nuance."

The report stated that in addition to Nuance's expertise in healthcare, it also provides AI solutions and customer engagement tools to companies globally across many industries for use in digital and biometric solutions, virtual assistants and interactive voice response. The two companies believe that the integration of Nuance AI products with Microsoft's cloud offerings Azure, Teams and Dynamics 365 will be instrumental in delivering the next generation of software and cloud solutions for enhancing customer engagement and security.

Nuance Communications' CEO Mark Benjamin remarked, "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 meaningful and certain value to our shareholders who have driven and supported us on this journey."

The report stated that the transaction has already been unanimously approved by each company's Board of Directors and is expected to close by the end of December of this year subject to approval by Nuance's common shareholders along with customary closing conditions and required regulatory approvals. Upon closing, Mark Benjamin will to continue to hold his current position as CEO of Nuance and will report directly to Scott Guthrie, E.V.P. of Cloud & AI at Microsoft.

Microsoft is headquartered in Redmond, Wash. The firm creates, licenses and supports a range of business and productivity software products, services and devices across personal computers, mobile devices and the intelligent cloud.

Nuance Communications is a conversational healthcare-AI focused and ambient intelligence technology company based in Burlington, Mass. Nuance provide omni-channel, enterprise AI solutions and services to 77% of the hospitals in the U.S. The company stated that it offers worldwide AI solutions to 85% of the Fortune 100 companies worldwide in the financial services, government, healthcare, retail, telecommunications and other sectors.

Nuance Communications started off the day with a market cap of around $13.0 billion with approximately 285.1 million shares outstanding and a short interest of about 8.9%. NUAN shares opened 18% higher today at $53.75 (+$8.17, +17.92%) over Friday's $45.58 closing price and reached a new 52-week high this morning of $53.93. The stock has traded today between $52.87 and $53.93 per share and is currently trading at $52.80 (+$7.23, +15.84%).

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