Microsoft has announced that it has agreed to acquire Nuance at an EV of $19.7 billion. The merger values Nuance at $56.00 per share, a 23% premium to Nuance’s closing price on Friday the 9th.
The acquisition marks another move by Microsoft to dominate the cloud computing industry by adding more power to its platform. Nuance, which focuses on conversational and cloud-based AI solutions for healthcare providers, will become a part of Microsoft’s Intelligent Cloud segment.
Nuance CEO Mark Benjamin describes being bought by Microsoft as an opportunity to “bring focus and global scale” to its business by leveraging the ubiquity and resources that Microsoft has to offer.
For Microsoft, AI and cloud computing are deeply interlinked; in fact, they are a single department at the company. Nuance is a natural addition because it already combines cloud computing and AI, and because it has already been widely adopted (77% of hospitals in the U.S. use Nuance AI solutions).
Because of this, Microsoft hopes that Nuance will allow it to penetrate more deeply into the healthcare market with Microsoft Cloud for Healthcare, and potentially apply Nuance’s technology to other sectors.