Microsoft Corp. has agreed to acquire speech-recognition firm Nuance Communications Inc. for $16 billion, pushing further into health technology and adding to a series of deals that have widened the range of software tools it offers customers.
The all-cash deal pays $56 per Nuance share, a 23% premium over Friday’s closing price. The companies put its value including debt at $19.7 billion.
The acquisition is Microsoft’s second largest under Chief Executive Satya Nadella. The company spent about $26 billion for professional network LinkedIn Corp. in 2016.
Nuance, based in Burlington, Mass., was a pioneer in speech recognition and artificial intelligence technology. Its software formed the basis of Apple Inc.’s Siri voice assistant before an in-house version was introduced. Nuance was exploring a possible sale as far back as 2014, when Samsung Electronics Co. and private-equity firms were seen as the most likely buyers.
Voice assistants have taken hold as consumers have embraced smart devices around their home. Amazon.com Inc. helped popularize its Alexa voice assistant through its Echo smart speaker, and Alphabet Inc.’s Google offered equipment with its version of a virtual helper, called Google Assistant.