Microsoft in advanced talks to buy the speech recognition company Nuance

Microsoft is in advanced talks to acquire speech recognition company Nuance Communications, a person familiar with the talks told CNBC on Sunday. A transaction could be signed on Sunday and announced immediately on Monday, the person said.

The plans illustrate Microsoft’s recent efforts to expand through offerings. Microsoft considered buying the US operations of the video sharing application TikTok last year, and last month completed the $ 7.5 billion acquisition of video game maker Zenimax.

The nuance would be more in line with the part of Microsoft’s business that serves companies and governments. Nuance earns revenue by selling tools for speech recognition and transcription in physician visits, customer service calls, and voice messages. The company reported net income of $ 7 million with revenue of about $ 346 million in the fourth quarter, down 4% year-on-year. Nuance was established in 1992, with 7,100 employees since September.

Microsoft first approached Nuance in December, the person said, and is willing to pay about $ 56 per share for Nuance, the person said. This would give Nuance a share capital of about $ 16 billion, representing a premium of 23% over Friday’s closing price of $ 45.58 per share.

Bloomberg reported on Microsoft’s plans to buy Nuance earlier 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 acquisition in 2016.

Buying Nuance could expand Microsoft’s capabilities in voice software. Microsoft already has tools that developers can use to allow applications to transcribe speech into written words, and incorporates speech recognition into its own products, such as the Bing search engine and the Teams communication application.

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