Why Microsoft decided to buy Nuance at a premium

CNBC Television published this video item, entitled “Why Microsoft decided to buy Nuance at a premium” – below is their description.

CNBC’s Brian Sullivan discusses Microsoft’s acquisition of Nuance in a $16 billion deal with CNBC’s Jon Fortt and Daniel Newman of Futurum Research. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Microsoft announced Monday that it will buy speech recognition company Nuance Communications for $56 per share, about 23% above its closing price Friday. The deal is worth about $16 billion and about $19 billion including debt.

It’s the latest sign Microsoft is hunting for more growth through acquisitions. The company is also reportedly in talks to buy the chat app Discord for about $10 billion. On top of that, Microsoft made an effort to buy TikTok’s U.S. business last year for about $30 billion before the deal was derailed.

The Nuance acquisition represents Microsoft’s largest acquisition since it bought LinkedIn for more than $26 billion in 2016. Last month, Microsoft completed its $7.6 billion acquisition of gaming company Zenimax.

Shares of Nuance ended the trading day up 15.95% Monday. Microsoft shares were up slightly.

Nuance would be aligned with the part of Microsoft’s business that serves businesses and governments. Nuance derives revenue by selling tools for recognizing and transcribing speech in doctor office visits, customer-service calls and voicemails. In its announcement, Microsoft said Nuance’s technology will be used to augment Microsoft’s cloud products for health care, which were launched last year.

In an interview on CNBC’s “Squawk on the Street” Monday, Microsoft CEO Satya Nadella highlighted Nuance’s health care tools as the key driver behind the acquisition.

“We’ve seen a massive accelearation of digital transformation… health care in particular,” Nadella said. “When you think about the provider market… digital tech is going to be the key.”

Nuance reported $7 million in net income on about $346 million in revenue in the fourth quarter of 2020, with revenue declining 4% on an annualized basis. Nuance was founded in 1992, and had 7,100 employees as of September.

Microsoft said Nuance CEO Mark Benjamin will remain at the company and report to Scott Guthrie,who is in charge of Microsoft’s cloud and artificial intelligence businesses.

Nuance has a strong reputation for its voice recognition technology, and it has been considered an acquisition target for companies like Apple, Microsoft and more for several years. Microsoft already has voice recognition built into many of its products, but it has recently shut down some products featuring its voice assistant Cortana.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision

» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC

» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online

Get the latest news: http://www.cnbc.com/

Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC

Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC

Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC

Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/

#CNBC

#CNBCTV

CNBC Television YouTube Channel

Got a comment? Leave your thoughts in the comments section, below. Please note comments are moderated before publication.


About This Source - CNBC Television

CNBC is an American pay television business news channel, which primarily carries business day coverage of U.S. and international financial markets. Following the end of the business day and on non-trading days, CNBC primarily carries financial and business-themed documentaries and reality shows.

As of February 2015, CNBC is available to approximately 93,623,000 pay television households (80.4% of households with television) in the United States.

Recent from CNBC Television:

The narrative behind big tech is 'very strong', they are must own stocks, says laffer tengler ceo 1

The narrative behind Big Tech is ‘very strong’, they are must own stocks, says Laffer Tengler CEO

The Biden campaign can’t fix messaging around age, says Mick Mulvaney

Last Call panel weighs in on Sports Illustrated laying off entire staff

In This Story: Microsoft

Microsoft Corporation (NASDAQ: MSFT) is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.

4 Recent Items: Microsoft

Analyst expects ‘more materiality’ on Microsoft’s AI growth

Where to Eat and Drink at the World Economic Forum in Davos

Kerry Praises Biden, Says He’ll Help 2024 Re-Election Campaign

Microsoft CEO Nadella on AI Wave and Tech in 2024

In This Story: Podcast

A podcast is an episodic series of digital audio files that a user can download to a personal device for easy listening.

3 Recent Items: Podcast

Would you rather have Belichick or Harbaugh? | The Will Cain Show

Who’s the most clinical? Callum Wilson or Michail Antonio? | Footballer’s Football Podcast

Inside story of Perth’s epic BBL|12 Final run chase | KFC BBL

Leave a Comment

We don't require your email address, or your name, for anyone to leave a comment. If you do add an email address, you may be notified if there are replies to your comment - we won't use it for any other purpose. Please make respectful comments, which add value, and avoid personal attacks on others. Links are not allowed in comments - 99% of spam comments, attempt to post links. Please describe where people may find additional information - for example "visit the UN website" or "search Google for..." rather than posting a link. Comments failing to adhere to these guidelines will not be published.