Please ensure Javascript is enabled for purposes of website accessibility

Nuance Raises Its Voice

By Dave Mock – Updated Nov 15, 2016 at 12:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Its acquisition of VoiceSignal is a smart move in the market for mobile voice translation.

Speech specialist and Motley Fool Hidden Gems recommendation Nuance Communications (NASDAQ:NUAN) is playing town crier once again and heralding a new acquisition -- that of mobile software maker VoiceSignal Technologies. Nuance announced that it intends to pay approximately 5.8 million shares of common stock and a net cash payment of $204 million, valuing the deal just shy of $300 million.

Management decided it was time to further penetrate the market for mobile voice translation, where functions of a mobile phone can be activated by simple, spoken commands. Privately held VoiceSignal has a strong presence in this market already, with its speech interpretation software pre-installed on many popular wireless devices from Nokia (NYSE:NOK), Motorola, and Research In Motion (NASDAQ:RIMM). The company claims that its software solution has been embedded in more than 110 million phones since 2002.

The acquisition adds to a long list of companies that Nuance has acquired and integrated into operations. The serial acquirer has built its speech and dictation business in pieces over the last several years, buying assets from the likes of Lernout & Hauspie in 2002 and more recently acquiring Dictaphone. The approach has given the company a broad revenue base across several markets related to automated speech recognition, image recognition, and dictation services.

While Nuance will pile on more debt as a result of the purchase, it's smart to pounce on VoiceSignal at this juncture. The mobile search and advertising business is gaining momentum, and companies are scrambling to either buy or build the tools necessary to tap the value of all sorts of mobile transactions. Witness recent acquisitions such as Microsoft's (NASDAQ:MSFT) purchase of Tellme and Time Warner's (NYSE:TWX) buy of Third Screen Media to help prevent online media giants Google (NASDAQ:GOOG) and Yahoo! (NASDAQ:YHOO) from taking over the space. Each of these giants and a host of others are angling for a way into the lucrative value chain of mobile services and the advertising attached to it.

With Nuance's dominance of speech applications across multiple industries, the acquisition of VoiceSignal should give it new tools to help further position the company to cash in on the booming trend of voice access and control.

For related Foolishness:

Nuance has returned Motley Fool Hidden Gems subscribers a whopping 136% since being recommended in January 2006. To see what other recommended stocks are beating the pants off the market, take a free 30-day trial.  

Fool contributor Dave Mock speaks softly but has little need to carry a big stick -- Jedi mind tricks work just fine. He owns shares of Motorola. Dave is the author of The Qualcomm Equation. No limp wrists here -- The Fool's disclosure policy always gives a firm, confident handshake.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nuance Communications, Inc. Stock Quote
Nuance Communications, Inc.
NUAN
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Nokia Corporation Stock Quote
Nokia Corporation
NOK
$4.26 (-4.05%) $0.18
Time Warner Inc. Stock Quote
Time Warner Inc.
TWX
BlackBerry Stock Quote
BlackBerry
BB
$5.07 (-3.24%) $0.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.