Microsoft grabs Nuance as latest healthcare bet

Microsoft
(Microsoft)

Deal value: $19 billion
Announced: April 12, 2021
Closing date: End of 2021

Microsoft is shelling out a hefty $19.7 billion for Nuance Communications, a pioneer in voice recognition and natural language understanding, to bolster its ambitions in the healthcare market.

It marks the software giant’s second-largest acquisition after buying LinkedIn for $26 billion. The purchase price includes $3.7 billion for Nuance's net debt, which Microsoft acquires.

Microsoft cleared a major U.S. antitrust hurdle in the U.S. back in June after the deadline for the U.S. government to object to the deal had expired.

Based in Burlington, Massachusetts, Nuance is considered a pioneer in speech recognition and artificial intelligence technology used in healthcare. The company's technology is used by more than 55% of physicians and 75% of radiologists in the U.S. and used in 77% of U.S. hospitals, according to the company.

The company saw revenue for its healthcare cloud business grow 37% year-over-year in its fiscal year 2020.

Nuance is known by many as the company that helped make Apple's Siri, but its voice technology is used in a number of ways within the medical industry.

RELATED: Microsoft to buy Nuance in a $19.7B deal to expand healthcare AI, cloud capabilities

“AI is technology’s most important priority, and healthcare is its most urgent application,” Microsoft CEO Satya Nadella said when the deal was announced.

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI. 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.”

Microsoft and Nuance have worked together for the past two years on artificial intelligence software that helps doctors record conversations with patients and integrate them into electronic health records. In 2019, the two companies announced they were collaborating to use ambient technology combined with AI, automation and cloud computing to create an exam room experience where the clinical documentation "writes itself."

The planned acquisition of Nuance is the latest step in Microsoft’s industry-specific cloud strategy, the company said.

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 companies said.

Microsoft grabs Nuance as latest healthcare bet