Nuance Buys Philips' Speech Recognition Unit For $96 Million

PSRS specializes in medical documentation requirements for hospitals, physician practices, and health care organizations.
Speech-recognition specialist Nuance Communications reported Friday that it has acquired a speech-recognition unit of Royal Philips Electronics in a move that will support Nuance's drive into speech-driven clinical documentation and communications at European health care organizations.

Nuance, of Burlington, Mass., said the acquisition transaction is valued at $96 million. The Philips unit, officially called Philips Speech Recognition Systems (PSRS), is based in Vienna, Austria, and provides a wide variety of speech-recognition solutions in 25 languages to meet medical documentation requirements for hospitals, physician practices, and other health care organizations.

"We anticipate that our health care business will now deliver worldwide revenues in excess of $410 million in fiscal year 2009," said Nuance CFO Tom Beaudoin in a statement. "Operating margins in our health care business should be up sharply, above the corporate average for the full fiscal year, as we realize the synergies from fully integrating PSRS and leverage the operational momentum in our North American healthcare business."

Nuance has been building its voice-recognition businesses largely through acquisitions and has targeted health care as an important area of growth for the company. The PSRS acquisition provides Nuance with an immediate and large presence in the field in Europe. PSRS serves more than 8,000 installations and has 100 OEM and channel partners.

Nuance noted that speech recognition is becoming ubiquitous in European health care markets. Adding that it plans to integrate PSRS's solutions with many of its existing speech-recognition products, including its Dragon Medical SDK, Nuance said that it plans to fully support all PSRS customers and partners in the future.

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