American technology major Microsoft has entered into a definitive agreement with Nuance Communications to buy the computer software technology corporation for $19.7 billion, according to a joint statement on Monday.
Microsoft will pay Nuance $56 for its shares in an all-cash transaction that includes Nuance’s net debt as well.
The deal is expected to provide Microsoft an advantage in cloud and AI software in the healthcare sector where Nuance is active. Microsoft introduced a cloud platform for the healthcare industry last year when the world was hit by the coronavirus pandemic.
"Nuance solutions are currently used by more than 55% of physicians and 75% of radiologists in the U.S., and used in 77% of U.S. hospitals," the statement said.
"Nuance’s Healthcare Cloud revenue experienced 37% year-over-year growth in Nuance’s fiscal year 2020 (ended September 2020)," it added.
Microsoft CEO Satya Nadella said: "AI is technology’s most important priority, and healthcare is its most urgent application."
Nuance CEO Mark Benjamin said his company has been focusing on healthcare and enterprise AI segments for the last three years. "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," he said.
While Microsoft shares were slightly down 0.3% in US market on Monday 40 minutes after opening bell, Nuance shares soared 16% to $53.2 on the Nasdaq.