Microsoft CEO Satya Nadella contemplates on January 24, 2019 during a group session on the third day of the World Economic Forum in Davos (Switzerland).
Jason Alden | Bloomberg | Getty Images
Microsoft announced Monday that it will buy voice recognition company Nuance Communications for $ 56 per share, about 23% above its closing price on Friday. The deal is worth about $ 16 billion.
It is the latest sign that Microsoft is looking for more growth through acquisitions. According to reports, the company is also in talks to buy the Discord chat app for about $ 10 billion. In addition, Microsoft made an effort to buy TikTok’s U.S. business last year for about $ 30 billion before derailing the deal.
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 rose nearly 23% in pre-market trading on Monday, representing roughly the same premium that Microsoft expects to pay based on Friday’s closing price. Trading stalled on the stock market after this saving and is expected to resume trading around 9am ET. Microsoft’s shares were slightly negative.
The nuance would be aligned with the part of Microsoft’s business that serves businesses and governments. The nuance earns revenue by selling tools to recognize and transcribe speech to doctor visits, customer service calls, and voice messages. In its announcement Monday, Microsoft said Nuance’s technology will be used to augment Microsoft’s cloud health products, which were launched last year.
The company reported net income of $ 7 million for revenue of about $ 346 million in the fourth quarter of 2020, a decrease of 4% annually. Nuance was founded in 1992 and had 7,100 employees in September 2020.
Microsoft said Nuance CEO Mark Benjamin will stay with the company and report to Scott Guthrie, Microsoft’s executive in charge of the company’s cloud and artificial intelligence business.
Nuance has a solid reputation for its voice recognition technology and has been considered an acquisition target for companies such as Apple, Microsoft and more for several years. Microsoft has already integrated voice recognition into many of its products, but has recently closed some products with its Cortana voice assistant.
This story is unfolding.
CNBC’s Alex Sherman and Jordan Novet contributed to this report.