One Speech Recognition Company Eats Another: Nuance Acquires VoiceSignal

nuancevoicesignal.pngNuance Communications, makers of speech recognition products, has signed an agreement to acquire VoiceSignal, also makers of speech recognition products(Business Wire).

The difference? Nuance focuses on call centers and desktop software, VoiceSignal uses speech recognition for search. You may be familiar with Nuance from their Naturally Speaking desktop software. VoiceSignal adds their install base of over 140 million in 21 languages to the mix.

Together, the two plan on growing out a host of voice-driven mobile applications that seem to include every current mobile application under the sun (local search, speech to text, directions, and speech calling). This is trail currently being blazed by projects like Google 411, Jingle Networks, Microsoft’s TellMe, and Spinvox.

Here’s an except on the terms of the deal:

Under the terms of the agreement, total consideration is approximately $293 million, net of cash, using yesterday’s closing price of $15.28 per share of Nuance common stock. The consideration comprises approximately 5.8 million shares of Nuance common stock and a net cash payment of $204 million.

The transaction is expected to close in the fiscal fourth quarter and is subject to customary closing conditions and regulatory approvals. In its fiscal year 2008, Nuance expects VoiceSignal to contribute between $55 million and $57 million in non-GAAP revenue; $40 million and $42 million in GAAP revenue; a GAAP loss between $0.04 and $0.05 per share; and non-GAAP earnings between $0.05 and $0.06 per diluted share. The combination is expected to generate approximately $8 million to $10 million in cost synergies in fiscal year 2008.