In a sign of further consolidation in the speech recognition market, Nuance Communications of Burlington, MA, today announced that it has purchased Philips Speech Recognition Systems (PSRS) in a deal worth 66 million euros ($96.1 million).
Philips Speech Recognition Systems is based in Vienna, Austria, and offers speech recognition software in 25 languages. The business has made recent acquisitions in Germany and Spain that have bolstered its position in the European market.
Nuance said it made a cash payment of 21.7 million euros for the business on September 26 and a deferred payment of 44.3 million euros to be paid in cash on September 21, 2009. Nuance expects the deal to add between $37 million and $40 million in non-GAAP revenue in fiscal 2009, as well as between $36 million and $39 million in GAAP revenue after adjusting for revenue lost to purchase accounting principles.
With the deal, Nuance said it now expects its healthcare business to produce worldwide revenue in excess of $410 million in fiscal 2009. The deal gives Nuance more than 8,000 PSRS installations and the division's team of sales, marketing, development, and support personnel throughout Europe. All 170 PSRS employees will transfer to Nuance as part of the transaction.
Nuance has rapidly grown its position in the speech recognition and healthcare IT segments with multiple acquisitions in the last several years, the largest of which was its purchase of Dictaphone in 2006 for $359 million. Other recent deals include the purchases of computer-aided medical transcription software provider eScription in May 2008, critical test results management (CTRM) software developer Vocada in November 2007, and radiology workflow optimization developer Commissure in October 2007.
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