Nuance Communications Up 17% After Microsoft Deal
By Michael Dabaie
Nuance Communications Inc. shares were up 17% to $53.24 in
Microsoft Corp. before the market open said it would acquire
cloud and AI software company Nuance Communications for $56 a
share, implying a 23% premium to Nuance's $45.58 closing price
Microsoft said the all-cash transaction is valued at $19.7
billion, including Nuance's net debt.
The acquisition will double Microsoft's total addressable market
in the healthcare provider space, bringing the company's TAM in
healthcare to nearly $500 billion, Microsoft said.
Microsoft's acquisition of Nuance builds upon the existing
partnership between the companies that was announced in 2019.
For Microsoft, "this is the right acquisition at the right time
with Microsoft doubling down on its healthcare initiatives over the
coming years. The Nuance deal is a strategic no brainer in our
opinion for MSFT and fits like a glove into its healthcare
endeavors at a time in which hospitals and doctors are embracing
next generation AI capabilities from thought leaders such as
Nuance," Wedbush said in an analyst note.
"Clearly, [Microsoft] is on the 'offensive' around M&A with
the company in a clear position of strength to capitalize on its
entrenched position in the cloud going forward with Nuance another
feather in its cap," Wedbush said.
"While the price tag may seem hefty in comparison to many of
Microsoft's past acquisitions, we believe the post-acquisition
transition can be done seamlessly given how close the companies
have become through ambient clinical intelligence," Stifel said in
a note issued before Microsoft confirmed the deal.
Write to Michael Dabaie at firstname.lastname@example.org
(END) Dow Jones Newswires
April 12, 2021 10:40 ET (14:40 GMT)
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