REDMOND, Wash., and
BURLINGTON, Mass., April 12, 2021 /PRNewswire/ -- Microsoft
Corp (Nasdaq: MSFT) and Nuance Communications, Inc. (Nasdaq: NUAN)
today announced they have entered into a definitive agreement under
which Microsoft will acquire Nuance for $56.00 per share, implying a 23% premium to the
closing price of Nuance on Friday, April
9, in an all-cash transaction valued at $19.7 billion, inclusive of Nuance's net debt.
Nuance is a trusted cloud and AI software leader representing
decades of accumulated healthcare and enterprise AI experience.
Mark Benjamin will remain CEO of
Nuance, reporting to Scott Guthrie,
executive vice president of Cloud & AI at Microsoft. The
transaction is intended to close this calendar year.
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 a leading provider of conversational AI
and cloud-based ambient clinical intelligence for healthcare
providers. Nuance's products include the Dragon Ambient eXperience,
Dragon Medical One and PowerScribe One for radiology reporting, all
leading clinical speech recognition SaaS offerings built on
Microsoft Azure. Nuance's solutions work seamlessly with core
healthcare systems, including longstanding relationships with
Electronic Health Records (EHRs), to alleviate the burden of
clinical documentation and empower providers to deliver better
patient experiences. 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. Nuance's Healthcare Cloud revenue
experienced 37% year-over-year growth in Nuance's fiscal year 2020
(ended September 2020).
Microsoft's acquisition of Nuance builds upon the successful
existing partnership between the companies that was announced in
2019. By augmenting the Microsoft Cloud for Healthcare with
Nuance's solutions, as well as the benefit of Nuance's expertise
and relationships with EHR systems 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
extended partner ecosystem, as well as the highest standards of
data privacy, security and compliance.
"Nuance provides the AI layer at the healthcare point of
delivery and is a pioneer in the real-world application of
enterprise AI," said Satya Nadella,
CEO, Microsoft. "AI is technology's most important priority, and
healthcare is its most urgent application. 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 in Healthcare and Nuance."
Beyond healthcare, Nuance provides AI expertise and customer
engagement solutions across Interactive Voice Response (IVR),
virtual assistants, and digital and biometric solutions to
companies around the world across all industries. This
expertise will come together with the breadth and depth of
Microsoft's cloud, including Azure, Teams, and Dynamics 365, to
deliver next-generation customer engagement and security
solutions.
"Over the past three years, Nuance has streamlined its portfolio
to focus on the healthcare and enterprise AI segments, where there
has been accelerated demand for advanced conversational AI and
ambient solutions," said Mark
Benjamin, CEO, Nuance. "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. The 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."
The transaction has been unanimously approved by the Boards of
Directors of both Nuance and Microsoft. The deal is intended to
close by the end of this calendar year and is subject to approval
by Nuance's shareholders, the satisfaction of certain regulatory
approvals, and other customary closing conditions.
Upon 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 year 2022 and to be accretive in fiscal
year 2023 to non-GAAP earnings per share, based on the expected
close timeframe. Non-GAAP excludes expected impact of purchase
accounting adjustments, as well as integration and
transaction-related expenses. The acquisition will not impact the
completion of its existing share repurchase authorization.
Nadella, Benjamin, Guthrie and Microsoft Chief Financial Officer
Amy Hood will host a webcast for
investors and media on April 12,
2021, at 8 a.m. Pacific
Time/11 a.m. Eastern Time
regarding this transaction. The presentation is available via
webcast at https://aka.ms/MS-Investor-Call or to
international callers at +1 (201) 689-8023 (no password required),
or to U.S. 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 is
acting as its legal advisor. Evercore is acting as exclusive
financial advisor to Nuance, while Paul, Weiss, Rifkind, Wharton
& Garrison LLP is acting as its legal advisor.
About Microsoft
Microsoft (Nasdaq "MSFT" @microsoft) enables digital transformation
for the era of an intelligent cloud and an intelligent edge. Its
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 percent of U.S.
hospitals and 85 percent of the Fortune 100 companies worldwide,
Nuance creates intuitive solutions that amplify people's ability to
help others.
Trademark reference: Nuance and the Nuance logo are 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 relevant materials with the Securities and
Exchange Commission (the "SEC"), including a proxy statement on
Schedule 14A. Promptly after filing its definitive proxy statement
with the SEC, the Company will mail the definitive proxy statement
and a proxy card to each stockholder entitled to vote at the
special meeting relating 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 definitive proxy statement, the preliminary proxy
statement and other relevant materials in connection with the
transaction (when they become available), and any other documents
filed by the Company with the SEC, may be obtained free of charge
at the SEC's website (http://www.sec.gov) or at 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 be
participants in the solicitation of proxies from the Company's
stockholders 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 on Schedule 14A filed with the SEC on December 17, 2020. To the extent that holdings of
the Company's securities have changed since the amounts printed in
the Company's proxy statement, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. Information regarding the identity of the participants,
and their direct or indirect interests in the transaction, by
security holdings or otherwise, will be set forth in the proxy
statement and other materials to be filed with 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 regarding the
benefits of the transaction, the anticipated timing of the
transaction and the products and markets of each company. These
forward-looking statements generally are identified by the words
"believe," "project," "predicts," "budget," "forecast," "continue,"
"expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "could," "should," "will," "would,"
"will be," "will continue," "will likely 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 but not limited to: (i)
the risk that the transaction may not be completed in a timely
manner or at all, which may adversely affect Nuance's business and
the price of the common stock of Nuance, (ii) the failure to
satisfy the conditions to the consummation of the transaction,
including the adoption of the merger agreement by the stockholders
of Nuance and the receipt of certain governmental 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 pendency of the
transaction on Nuance's business relationships, operating results,
and business generally, (v) risks that the proposed transaction
disrupts current plans and operations of Nuance or Microsoft and
potential difficulties in Nuance employee retention as a result of
the transaction, (vi) risks related to diverting management's
attention from Nuance's ongoing business operations, (vii) the
outcome of any legal proceedings that may be instituted against us
or against Nuance related to the merger agreement or the
transaction, (viii) the ability of Microsoft to successfully
integrate Nuance's operations, product lines, and technology, and
(ix) the ability of Microsoft to implement its plans, forecasts,
and other expectations with respect to Nuance's business after the
completion of the proposed merger and realize additional
opportunities for growth and innovation. In addition, please refer
to the documents that Microsoft and Nuance file with the SEC on
Forms 10-K, 10-Q and 8-K. These filings identify and address other
important 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 put undue reliance on 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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SOURCE Microsoft Corporation