Nuance Communications today announced that it has entered into an agreement to buy eScription, a provider of computer-aided medical transcription technology, for approximately $400 million.
The company said that the deal would enhance its ability to provide advanced transcription solutions. The deal is likely to close in Nuance's fiscal third quarter of 2008, subject to customary closing conditions and regulatory approvals, according to Burlington, Mass.-based Nuance.
Nuance said that the total consideration was split into $340 million cash and $23 million in Nuance common stock and the assumption of vested employee options, valued at around $37 million.
In relation to the transaction, Nuance reported that global private equity firm Warburg Pincus has agreed to invest an aggregate of $100 million by buying 5.7 million shares of its common stock.
Nuance, which offers speech-based solutions for businesses and consumers, stated that healthcare providers are facing problems like soaring healthcare costs, declining medical transcription workforce and stringent regulations for clinical documentation. Nuance claimed that the acquisition of the Needham, Mass.-based company will create synergies that can help provide innovative technologies like structured reporting, aimed at increasing productivity, reducing costs and improving data reporting.
“The combined company will focus on continued innovation to evolve healthcare documentation and lower transcription costs in excess of $1 billion in the next few years,” according to Paul Ricci, Nuance chairman and CEO.