Microsoft today said it will buy AI health firm Nuance Communications in a $19.7bn (£14.3bn) deal as it looks to bolster its healthcare offering.
Massachusetts-based Nuance offers artificial intelligence and speech technology services designed to automate clinical administrative work and reduce the burden of paperwork on doctors.
Microsoft said its offer of $56 per share represented a 23 per cent premium on Nuance’s closing price on Friday. The deal, which includes Nuance’s net debt, is expected to close this year.
The merger builds on a partnership inked between the two companies in 2019 to combine the health firm’s technology with Microsoft’s cloud services.
It also marks increased demand for health tech services after the Covid-19 pandemic sparked a shift to virtual medical consultations.
Microsoft has been ramping up its cloud offerings for specific industries, including the launch of Microsoft Cloud for Healthcare last year.
“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI,” said Microsoft chief executive Satya Nadella.
“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 for Healthcare and Nuance.”
Beyond healthcare, Nuance also helped to develop Apple’s Siri voice assistant and makes software for a range of other sectors including the automotive industry.
Following the merger Mark Benjamin will remain chief executive of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.