April 12, 2021 - Microsoft and Nuance Communications recently entered into a $19.7 billion definitive agreement under which Microsoft will acquire Nuance to boost its healthcare cloud strategy. 

Microsoft will acquire Nuance for $56.00 per share, implying a 23 percent premium to the closing price of Nuance, a cloud and artificial intelligence software leader. 

The acquisition furthers Microsoft’s efforts in industry-specific cloud offerings to support customers and partners, including the Microsoft Cloud for Healthcare, which was introduced in  November 2020. 

Microsoft Cloud for Healthcare helps to boost patient engagement, health team collaboration, and clinical and operational insights. Additionally, the product provides integrated capabilities that deliver automation and efficacy for workflows, as well as deep data analytics for structured and unstructured data.

Microsoft intends for its latest acquisition to advance its healthcare cloud offerings using artificial intelligence (AI).

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” Satya Nadella, CEO of Microsoft, said in the announcement. 

“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 for Healthcare and Nuance,” Nadella continued. 

Nuance’s products include the Dragon Ambient eXperience, Dragon Medical One, and PowerScribe One for radiology reporting. All of these products were built on Microsoft Azure. 

Nuance’s solutions work seamlessly with core healthcare systems, such as electronic health records. This diminishes the burden of clinical documentation and empowers providers to deliver better patient experiences, the company says. 

Currently, the company’s solutions are used by over 55 percent of physicians and 75 percent of radiologists in the US. Additionally, about 77 percent of hospitals use the solutions. 

Beyond that, Nuance also provides artificial intelligence expertise and customer engagement solutions across Interactive Voice Response (IVR), virtual assistants, and digital and biometric solutions to companies globally and across various industries. 

“Our 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,” said Mark Benjamin, CEO of Nuance. 

In October 2019, Microsoft and Nuance joined forces to help transform healthcare delivery and accelerate the delivery of clinical intelligence technologies. Microsoft’s acquisition of Nuance builds on the existing partnership between the companies. 

The companies will also further existing commitments to the extended partner ecosystem, as well as the highest standards of data privacy, security, and compliance.

As part of the acquisition, Mark Benjamin will remain CEO of Nuance and report to Scott Guthrie, executive vice president of cloud & artificial intelligence at Microsoft. 

The transaction was unanimously approved by the Boards of Directors of both Nuance and Microsoft and is expected to close later this year, subject to approval by Nuance's shareholders, the satisfaction of certain regulatory approvals, and other customary closing conditions.