Scansoft and Nuance plan $221m merger
If you want to merge, say 'yes' after the tone
Speech recognition firms Scansoft and Nuance are to merge in a deal worth an estimated $221m. Scansoft will buy up all the outstanding Nuance common stock in a cash and shares deal.
Nuance shareholders will get 0.77 Scansoft shares and $2.20 in cash for each Nuance share they own. This will see Scansoft issue around 28 million common shares to complete the deal.
The new company will be known as Nuance (well, Scansoft doesn't exactly conjure up clear images of speech recognition now, does it?) but will be headed up by Scansoft's chairman and CEO Paul Ricci. Two of Nuance's board members, including Chuck Berger, president and CEO of Nuance, will join the ScanSoft board of directors. The deal is subject to regulatory approval and should close in September 2005.
The enlarged company will employ 300 speech scientists and engineers, and hold a combined portfolio of more than 250 speech-related patents. Scansoft says the combined revenue from both companies will exceed $315m, and that the merger will boost profits for 2006 as a whole.
The company will look to reduce expenses by between $20m and $25m per year through headcount reductions, consolidation of offices and de-duplication of operating expenses.
After the close of trading, Nuance's shares rose on the back of the news, jumping 55 per cent. Scansoft stock, meanwhile, took a 12 per cent slide dropping from $4.53 to $4.00, Reuters reports.
The press announcement is here. ®