Editor's take: Microsoft may have struck out with Cortana but is getting a mulligan with Nuance. Redmond is only talking healthcare applications right now but we wouldn't be surprised to see Nuance tech show up in other Microsoft-owned products like Teams down the road.

Microsoft has agreed to purchase speech recognition and artificial intelligence specialist Nuance in a bid to strengthen its cloud and AI-based healthcare business.

Microsoft said the all-cash deal is valued at $19.7 billion, or $56 per share – representing a 23 percent premium over Nuance’s most recent closing price. Once complete, it’ll be Microsoft’s second-largest acquisition ever, after the $26.2 billion it paid for LinkedIn in 2016.

Nuance has been a leader in the field of voice recognition for years, leading to widespread adoption in healthcare. According to Microsoft’s press release, Nuance products are used for clinical documentation by 55 percent of physicians and 75 of radiologists in the US.

Commercially, however, Nuance is arguably best known for its Dragon speech recognition software. What you may not know is that Apple’s Siri voice assistant was also rooted in tech provided by Nuance.

Microsoft said it expects the transaction to close during the current calendar year, pending regulatory approval and other customary closing conditions. Nuance CEO Mark Benjamin will stay with the company in his current role and report to Scott Guthrie, who is the executive vice president of Microsoft’s cloud and AI business. Financials from the division will be reported under Microsoft's Intelligent Cloud segment, we're told.

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