Microsoft to acquire radiology vendor Nuance in $19.7B deal

Microsoft has reached an agreement to purchase radiology vendor Nuance Communications in a deal valued at $19.7 billion, the two announced Monday morning.

The Redmond, Washington-based tech giant was reportedly the highest bidder for Nuance, which sells solutions for sharing medical images and processing radiology reports using artificial intelligence.

Microsoft officials said the latter was a key part of its decision to acquire the Burlington, Massachusetts-based company.

“Nuance provides the AI layer at the healthcare point of delivery and is a pioneer in the real-world application of enterprise AI," CEO Satya Nadella said April 12. "AI is technology's most important priority, and healthcare is its most urgent application. Together, with our partner ecosystem, we will put advanced AI solutions into the hands of professionals everywhere to drive better decision-making and create more meaningful connections, as we accelerate growth of Microsoft Cloud for Healthcare and Nuance." 

Mark Benjamin will remain chief executive of Nuance following the deal, reporting to Scott Guthrie, executive VP of cloud and AI at Microsoft. Nuance also makes solutions outside of healthcare, including virtual assistants and biometric solutions. Its technology is currently used by 55% of all physicians in the country, 75% of radiologists, and 77% of all U.S. hospitals. Acquiring the company will double Microsoft’s total addressable market in the healthcare provider space, climbing to nearly $500 billion, officials said.

The two said they hope to close the transaction by the end of 2021, subject to regulatory approval and a vote by Nuance’s shareholders. Microsoft’s board of directors, meanwhile, already gave its unanimous blessing.

Bloomberg first reported news of the transaction over the weekend.