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Microsoft accelerates industry cloud strategy for healthcare with the acquisition of Nuance – Stories

The acquisition will combine solutions and expertise to deliver new AI and cloud capabilities in healthcare and other industries

Microsoft and Nuance logos

redmond, washington, and burlington, mass. – April 12, 2021 – Microsoft Corp (NASDAQ: MSFT) and Nuance Communications, Inc. (nasdaq: nuan) today announced that they have entered into a definitive agreement under which microsoft will acquire nuance for $56.00 per share, a 23% premium over nuance’s closing price on friday, april 9, in an all-cash transaction valued at $19.7 billion, including nuance’s net debt. nuance is a trusted leader in cloud and AI software that represents decades of accumulated experience in healthcare and enterprise AI. mark benjamin will remain chief executive officer of nuance, reporting to scott guthrie, executive vice president of cloud & ai at microsoft. the transaction is targeted to close this calendar year.

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Microsoft has accelerated its efforts to provide industry-specific cloud offerings to support customers and partners as they respond to disruption and new opportunities. These efforts include the Microsoft Cloud for Healthcare, introduced in 2020, which aims to address the comprehensive needs of the rapidly transforming and growing healthcare industry. Today’s acquisition announcement represents the latest step in Microsoft’s industry-specific cloud strategy.

nuance is a pioneer and leading provider of cloud-based ambient clinical intelligence and conversational AI for healthcare providers. Nuance’s products include Dragon Ambient Experience, Dragon Medical One, and PowerScribe One for Radiology Reporting, all leading clinical speech recognition SAAS offerings based on Microsoft Azure. nuance solutions work seamlessly with leading healthcare systems, including longstanding relationships with electronic health records (ehrs), to ease the burden of clinical documentation and empower providers to deliver better patient experiences . Shade solutions are currently used by over 55% of physicians and 75% of radiologists in the US. in the US, and are used in 77% of the US. uu. hospitals nuance healthcare cloud revenue grew 37% year over year in nuance fiscal year 2020 (ended September 2020).

microsoft’s acquisition of nuance builds on the successful partnership between the companies that was announced in 2019. by augmenting the microsoft cloud for healthcare with nuance solutions as well as the benefit of nuance’s experience and relationships with ehr system providers, microsoft will be better able to empower healthcare providers through the power of ambient clinical intelligence and other microsoft cloud services. The acquisition will double Microsoft’s total addressable market (TAM) in the healthcare provider space, bringing the company’s TAM in healthcare to nearly $500 billion. nuance and microsoft will deepen their existing commitments to the expanded partner ecosystem, as well as the highest standards of data privacy, security, and compliance.

“Nuance provides the layer of AI at the point of care and pioneers the real-world application of enterprise AI,” said Satya Nadella, CEO of Microsoft. “Artificial intelligence is technology’s highest priority, and healthcare is its most urgent application. Together, with our ecosystem of partners, we will put advanced AI solutions in the hands of professionals around the world to drive better decision-making and create more meaningful connections, as we accelerate the growth of the Microsoft Cloud for Healthcare and Nuance.” .

Beyond healthcare, Nuance provides AI expertise and customer engagement solutions through interactive voice response (IVR), virtual assistants, and digital and biometric solutions to businesses around the world in every industry. This experience will join the breadth and depth of the Microsoft Cloud, including Azure, Teams, and Dynamics 365, to deliver next-generation customer engagement and security solutions.

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“Over the past three years, Nuance has streamlined its portfolio to focus on the healthcare and enterprise AI segments, where there has been accelerating demand for environmental and advanced conversational AI solutions,” said Mark Benjamin, CEO of Nuance. nuance. “To seize this opportunity, we need the right platform to bring global scale and focus to our clients and partners to enable more personal, affordable and effective connections to people and care. The way forward is clearly with Microsoft, which delivers intelligent cloud-based services at scale and shares our passion for the ways technology can make a difference. At the same time, this combination offers a critical opportunity to deliver significant and secure value to our shareholders who have driven and supported us on this journey.”

The transaction has been unanimously approved by the boards of directors of nuance and microsoft. The deal is expected to close by the end of this calendar year and is subject to nuance shareholder approval, satisfaction of certain regulatory approvals and other customary closing conditions.

At time of closing, Microsoft expects nuance’s financials to be reported as part of Microsoft’s Intelligent Cloud segment. Microsoft expects the acquisition to be minimally dilutive (less than 1 percent) in fiscal 2022 and to be accretive to non-GAAP earnings per share in fiscal 2023, based on the expected closing time. non-gaap excludes the expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses. the acquisition will not affect the termination of your existing share repurchase authorization.

Nadella, Benjamin, Guthrie, and Microsoft CFO Amy Hood will host a webcast for investors and media on April 12, 2021, at 8 a.m. 11 a.m. Pacific Time ET regarding this transaction. The presentation is available via webcast at https://aka.ms/ms-investor-call or for international calls at +1 (201) 689-8023 (no password required), or for calls from the USA. uu. callers at (877) 407-0666 (no password required), at that time.

goldman sachs & co. llc is acting as exclusive financial advisor to microsoft, while simpson thacher & bartlett llp acts as your legal advisor. evercore is acting as exclusive financial advisor to nuance, while paul, weiss, rifkind, wharton & garrison llp acts as your legal advisor.

about microsoft microsoft (nasdaq “msft” @microsoft) enables digital transformation for the era of intelligent cloud and intelligent edge. their mission is to empower every person and every organization on the planet to achieve more.

About Nuance Communications, Inc. Nuance Communications (NASDAQ: Nuan) is a technology pioneer with market leadership in conversational AI and ambient intelligence. a full-service partner trusted by 77% of us uu. hospitals and 85% of the fortune 100 companies worldwide, nuance creates intuitive solutions that expand people’s ability to help others.

for more information, press only:

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microsoft media relations, we communications, (425) 638-7777, [email protected]

Note to Editors: For more information, news, and insights from Microsoft, visit the Microsoft News Center at http://news.microsoft.com. web links, phone numbers, and titles were correct at time of publication but may have changed. For additional assistance, journalists and analysts can contact the Microsoft Rapid Response Team or other appropriate contacts listed at https://news.microsoft.com/microsoft-public-relations-contacts. Trademark Reference: Nuance and the Nuance logo are either registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. all other trademarks referenced herein are the property of their respective owners.

additional information and where to find it

in connection with the transaction, nuance communications, inc. (the “Company”) will file the relevant materials with the Securities and Exchange Commission (the “SEC”), including a proxy statement on Exhibit 14a. Immediately after filing its final proxy statement with the SEC, the company will mail the final proxy statement and a proxy card to each shareholder entitled to vote at the special meeting related to the transaction. Investors and security holders of the company are urged to read these materials (including any amendments or supplements thereto) and any other relevant documents in connection with the transaction that the company will file with the SEC when they become available because they will contain important information. about the company and the transaction. The Final Proxy Statement, Preliminary Proxy Statement and other relevant materials in connection with the Transaction (where available), and any other documents filed by the Company with the SEC, may be obtained free of charge on the SEC website. (http://www.sec.gov) or on the Company’s website (http://investors.nuance.com) or by writing to Nuance Communications, Investor Relations, 1 Wayside Road, Burlington, Massachusetts, 01803.

The Company and certain of its directors and executive officers and other members of management and employees may be deemed to participate in the solicitation of proxies from the Company’s shareholders with respect to the transaction. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the Company’s proxy statement in Exhibit 14A filed with the SEC on December 17, 2020. To the extent that the company’s securities holdings have changed since the amounts printed in the company’s proxy statement, such changes have been or will be reflected in the change of ownership statements on Form 4 filed with sec. Information on the identity of the participants and their direct or indirect interests in the transaction, by holding securities or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with the transaction.

forward-looking statements

This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 with respect to the proposed transaction and business combination between microsoft and nuance, including statements about the benefits of the transaction, the anticipated timing of the transaction, and the products and markets of each company. these forward-looking statements are generally identified by the words “believe,” “project,” “predict,” “budget,” “forecast,” “continue,” “expect,” “anticipate,” “estimate,” “intend,” “strategy”, “future”, “opportunity”, “plan”, “may”, “could”, “should”, “will”, “will”, “will”, “continue”, “probably” result”, and similar expressions (or the negative versions of such words or expressions).Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties.many Factors could cause actual future events to differ materially from the forward-looking statements in this press release, including, without limitation: (i) the risk that the transaction may not be completed in a timely manner or may not be completed at all, which may harm affect nuance business and share price c of nuance, (ii) failure to comply with the conditions for the consummation of the transaction, including the adoption of the merger agreement by nuance shareholders and the receipt of certain government and regulatory approvals, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, (iv) the effect of the announcement or the processing of the transaction on nuance’s commercial relations, results of operations and the business in general, (v) risks that the proposed transaction disrupts nuance’s or microsoft’s current plans and operations and, as a result, potential difficulties in retaining nuance employees from the transaction, (vi) risks related to diverting management’s attention from operations ongoing business of nuance, (vii) the outcome of any legal proceedings that may be brought against us or nuance in connection with the merger or transaction, (viii) Microsoft’s ability to successfully integrate Nuance’s operations, product lines, and technology, and (ix) Microsoft’s ability to implement its plans, forecasts, and other expectations regarding the nuance’s business after completion of the proposed merger and take advantage of additional opportunities for growth and innovation. Also, see the documents that Microsoft and Matiz file with the section on Forms 10-K, 10-Q, and 8-K. These presentations identify and address other significant risks and uncertainties that could cause events and results to differ materially from those contained in the forward-looking statements set forth in this press release. forward-looking statements speak only as of the date they are made. Readers are cautioned not to place undue reliance on any forward-looking statements, and microsoft and nuance assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

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