Microsoft is negotiating a deal to buy Nuance Communications, an artificial intelligence and speech technology company, according to a report from Bloomberg News.
Bloomberg’s anonymous sources said that the deal could be announced this week, and would value Nuance at roughly $56 a share. This would value the company at $16 billion, a premium of 23% where the stock closed on Friday, $43.58.
Microsoft declined to comment to Bloomberg. Insider reached out to both firms for comment but they couldn’t be reached before publication.
Massachusetts-based Nuance, with a market cap just shy of $13 billion, is the developer of the Dragon Naturally Speaking family of voice technology products. Its speech recognition engine is the basis for Apple’s voice assistant Siri as well as dozens of other real world applications with enterprise clients.
Nuance and Microsoft began to collaborate in 2019 on medical applications such as automatic note-taking during doctors’ visits.
According to analyst Dan Ives at Wedbush Securities, Microsoft and Nuance Communications are two of the top three tech buys heading into first-quarter earnings season. Ives highlighted Nuance’s “hospital-wide deployments” of its technology, with has created a growing revenue stream. Wedbush set a $65 price target, above Microsoft’s reported bid.
Microsoft stock is up 15.4% from the end of the year at end of closing Friday.