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[September 15, 2005]

ScanSoft, Nuance Conclude Merger

By DAVID R. BUTCHER, Assistant Editor, Customer Interaction Solutions


ScanSoft, Inc., and Nuance Communications, Inc. today announced that the two companies have closed the merger of the two companies, originally announced in early May. As consideration, Nuance shareholders will receive 0.77 shares of ScanSoft common stock and $2.20 of cash for each share of Nuance common stock that they own.

The combination of these two top speech companies, formerly each others largest competitor, brings together the most comprehensive portfolio of speech applications, technologies and experience in the industry, enabling customers to effectively deploy innovative speech-based solutions. The now-combined single speech automation organization, which takes the Nuance corporate name, will have the technical resources and intellectual property required for developing new and innovative speech solutions to deliver enhanced value to customers.

According to Datamonitor, The Scansoft-Nuance merger is one of the boldest moves the speech industry has seen in the past two years. The research firm views the consolidation as a healthy indicator in a growing market and one that will help drive greater innovation and business solutions in the market.

The $221 million acquisition of Nuance, hopes the company, will result in cost savings of about 20 million to 25 million through head-count reduction and other measures of cost cutting.

ScanSoft and Nuance have realized great individual successes over the past years, and both have contributed significantly to establishing the speech industry, according to company statement from Chuck Berger, former president and CEO of Nuance Communications, Inc. and a new member of ScanSofts board of directors.

Upon the original merger announcement, Berger told TMC, Our two companies share a history of innovation. We pioneered this industry. Now were bringing that collective history together as one company.

Via dynamic technology, a premier partner network and a speech-dedicated organization, the company aims to compete more effectively in new and expanding markets, providing value for its most important stakeholders: its customers, partners, investors and employees.

Prior to the acquisition and merger, ScanSoft and Nuance, the two largest speech engine vendors, had a combined global revenue market share of over 75 percent.

The combination of our resources, talents and capabilities as a result of this merger puts us in an excellent position to amplify [our] successes, as well as to drive the industry to new heights, Berger noted.

For a copy of Datamonitors white paper regarding the ScanSoft-Nuance merger, visit TMCs IT Research Library.

David R. Butcher is Assistant Editor of Customer Interaction Solutions. To see more articles by David Butcher, please visit his archive.

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