Microsoft CEO Satya Nadella speaks at the Future Decoded Tech Summit in Bengaluru, India on February 25, 2020.
Samyukta Lakshmi | Bloomberg | Getty Images
Microsoft is in advanced talks to acquire voice recognition company Nuance Communications, a person familiar with the talks told CNBC on Sunday. A transaction could be signed as early as Sunday and announced as early as Monday, the person said.
The plans illustrate Microsoft’s recent efforts to grow through deals. Microsoft considered buying the US operations of video-sharing app TikTok last year and finalized last month’s $ 7.5 billion acquisition of video game maker Zenimax.
Nuance would be more aligned with the part of Microsoft’s business that serves businesses and governments. Nuance earns revenue by selling speech recognition and transcription tools during doctor visits, customer service calls and voicemail messages. The company reported net income of $ 7 million on revenue of approximately $ 346 million in the fourth quarter, with revenue down 4% on an annualized basis. Nuance was founded in 1992, with 7,100 employees in September.
Microsoft first contacted Nuance in December, the person said, and is prepared to pay around $ 56 per share for Nuance, the person said. That would give Nuance a net worth of around $ 16 billion, which is a 23% premium over Friday’s closing share price of $ 45.58 per share.
Bloomberg announced Microsoft’s plans to buy Nuance on Sunday. Microsoft declined to comment. A Nuance representative did not immediately respond to a request for comment.
At $ 16 billion, Nuance would be Microsoft’s second-largest acquisition, after LinkedIn’s $ 27 billion purchase in 2016.
The purchase of Nuance could expand Microsoft’s voice software capabilities. Microsoft already has tools developers can use to enable apps to translate speech into written words, and it integrates speech recognition into its own products, such as the Bing search engine and the Teams communication app.
LOOK: Stock market cage match: traders pit Apple and Microsoft