Nuance buys Transcend for $300 million, bolsters medical business

With the Transcend purchase, Nuance said it will be able to better target mid-sized hospitals.

Nuance Communications said it will acquire medical transcription company Transcend in a deal valued at $300 million, or $29.50.

The deal bolsters Nuance's healthcare business. Nuance's speech recognition technology is used in consumer devices and automobiles, the enterprise and health care industries.

With the Transcend purchase, Nuance said it will be able to better target mid-sized hospitals. Transcend also brings a services unit to Nuance. Transcend and Nuance offer transcription and editing software and services that can plug into electronic health records. Transcend's flagship program is called Encore. Here's where Encore fits into the healthcare workflow.

Speech recognition technology is a natural extension for physicians, who have been talking into recorders for years.

The Transcend transaction is expected to close in the second half of 2012. Nuance said Transcend will add $140 million to $150 million in revenue for fiscal 2013 as well as 8 cents a share to 9 cents a share in non-GAAP earnings. The GAAP earnings boost from Transcend will be 2 cents a share to 3 cents a share.

Transcend's executive team is expected to stick around after the acquisition.

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