ScanSoft Cleans Up At Lernout & Hauspie Fire Sale

Digital imaging company ScanSoft Inc. (SSFT-Nasdaq) bought the bulk of bankrupt Lernout & Hauspie Speech Products N.V.'s assets last week. Lernout & Hauspie, faced with more than $500 million in debts and unraveled by accounting fraud and the arrest of its founders, sold its remaining assets in a bankruptcy auction Nov. 27. ScanSoft, a spin-off from Xerox Corp., makes software that drives optical scanners and converts printed text and photos into electronic data. It bought most of Lernout & Hauspie's assets for $39.5 million in cash, debt, and equity. "The R&D teams have remained largely intact," ScanSoft CEO Paul Ricci says of Lernout & Hauspie, whose customer list includes Alcatel, AOL Time Warner, Microsoft, and Sony. Ricci says the purchase can help ScanSoft grow. Pickups include Lernout & Hauspie's RealSpeak text-to-speech software, and Dragon Naturally Speaking, a top speech-recognition product.