Kurzweil acquired by LHSPF :
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Headline: Lernout & Hauspie Achieves Major Milestone In Strategic Goals, Signs
Agreement To Acquire Kurzweil AI
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Acquisition Expected to Speed Development of a Continuous Dictation Offering
by Approximately six months, Strengthen L&H's Worldwide Market Position
SAN FRANCISCO, April 15 /PRNewswire/ -- Moving further toward its goal to
enhance its market position in the speech arena, Lernout & Hauspie Speech
Products (NASDAQ:LHSPF) announced today that it has signed a definitive
agreement to acquire Kurzweil Applied Intelligence, Inc. (Nasdaq: KURZ). Both
companies develop technologies and products that allow personal computers and
other devices to recognize spoken words and convert them into text or
automatically perform operations. As a result of this acquisition, Lernout &
Hauspie (L&H) will combine its efforts with those of Kurzweil AI to develop a
large vocabulary, speaker-independent, continuous dictation engine. L&H
believes the combined efforts will help accelerate its introduction of
continuous speech dictation products by approximately six months.
According to L&H the acquisition should enable it to develop products that
other speech companies have been unable to provide to date, among them a
technologically superior speaker-independent continuous dictation engine,
built "from the ground up." The acquisition will also augment L&H's strong
international presence with a broad base of U.S. customers and will
significantly expand its current sales channels.
L&H will acquire Kurzweil AI for approximately $53M U.S. in a purchase
transaction. The company believes it has and can obtain sufficient financial
reserves to cover this acquisition as well as to execute the integration
plans. Eighty percent of the purchase price will be paid in cash and 20
percent in newly issued shares of L&H common stock. The acquisition is
expected to be non-dilutive to L&H's earnings per share in 1997, and to be
accretive in 1998. The transaction is expected to be completed within a few
months, following a filing with the Securities and Exchange Commission and
approval by Kurzweil AI stockholders.
L&H is currently negotiating with the Dictation Consortium for the
Consortium to participate in the acquisition in order for them to benefit from
this accelerated product development. Under the terms of the revised
arrangement being discussed, the Dictation Consortium will pay up to $26M to
L&H out of the additional income that is anticipated to be generated from
forthcoming products in 1998 and thereafter as a result of the acquisition.
The Dictation Consortium is a Flanders Language Valley Foundation investment
dedicated to the development of continuous automated speech recognition.
This acquisition should not only accelerate L&H's market introduction of a
speaker-independent, continuous dictation engine but it should also increase
the revenues of L&H's continuous dictation products.
"We see significant synergy between the L&H and Kurzweil AI continuous
dictation development efforts," said Gaston Bastiaens, president of L&H. "As
a result of this acquisition we believe L&H will enhance its already strong
market position and be able to take advantage of the expected growth in voice-
enabled PC computing on a worldwide basis. The combined efforts of the two
companies should lead to an expanded research and development effort and,
leveraging L&H's significant multi-national experience, create a company with
strong, diverse multi-lingual products for a well-established international
customer base."
Tom Brew, president and CEO of Kurzweil AI added, "Kurzweil AI is in the
final stage of an extensive business transition. Both our medical software
and PC applications groups are benefiting from new products that were
introduced during the past 12 months. We expect this acquisition will
accelerate the development of our new continuous dictation technology, and
create additional opportunities for us to reach a worldwide market with our
product offerings."
Kurzweil AI is a leader in the voice-enabled medical reporting field,
providing software that healthcare professionals use to dictate notes and
create reports. Its voice-enabled clinical reporting systems, VoiceMED(TM)
and Kurzweil Clinical Reporter(TM) are used in more than 500 healthcare
institutions throughout the U.S. In addition, the company has introduced
Kurzweil Voice(TM), an easy-to-use voice recognition system for Windows-based
PCs, and Kurzweil VoicePad(TM), a voice-enabled word processing application.
Both Kurzweil Voice and Kurzweil VoicePad are widely distributed through the
PC retail channel in North America.
"This acquisition is good news for Lernout & Hauspie, Kurzweil AI, and the
speech industry," said speech industry analyst John Oberteuffer of Voice
Information Associates, Inc. "The combined companies will benefit the rapidly
growing speech technologies industry by creating a stronger competitor to the
other major speech recognition providers in the dictation market."
Both L&H and Kurzweil AI have been developing technology for continuous
speech dictation. L&H has been building a dictation engine for continuous
speech in a variety of languages as part of its development and
commercialization agreement with the Dictation Consortium. The further
development of this continuous dictation engine should serve as the foundation
for a variety of end-user applications in both vertical and horizontal
markets.
Tom Brew is expected to leave to pursue other business opportunities once
the acquisition is completed, but will remain available to L&H on a consulting
basis. In a related move, L&H named Koen Bouwers, corporate senior vice
president of L&H and president of L&H's dictation division. Bouwers will be
responsible for the integration and management of the combined activities.
Bouwers has an extensive track record as an international marketer and
business manager, most recently having served as general manager of Philips
Dictation Speech Products in the USA.
"As a result of the acquisition, L&H is now poised to seize a leadership
position in the worldwide dictation market," Bouwers said. "In addition to
providing L&H with leading products in the medical software and PC
applications markets, Kurzweil's strengths complement L&H's in a number of
ways. L&H is a speech technology leader internationally, while Kurzweil AI is
very strong in North America. And, L&H has established a strong original
equipment manufacturer (OEM) channel, while Kurzweil AI has established solid
US retail and US medical direct sales channels."
In 1996 L&H reported total revenue of $31 million, an increase of 400
percent over fiscal year 1995. L&H currently has more than 400 employees
worldwide; Kurzweil AI has 110. L&H plans to retain Kurzweil AI's research
and development staff, and anticipates staff and costs reduction in both
companies only in areas where there is redundancy.
About Kurzweil AI
Kurzweil AI, headquartered in Waltham, Mass. was founded in 1982. The
company develops, markets and supports automated speech recognition software
used to create documents and interact with computers by voice. Kurzweil Voice
is an easy-to-use voice recognition system for Windows-based PCs, and Kurzweil
VoicePad is a voice-enabled word processing applications. The company's
medical reporting systems, VoiceMED and Kurzweil Clinical Reporter, are used
in more than 500 healthcare institutions nationwide.
About Lernout & Hauspie
Lernout & Hauspie Speech Products (L&H) is an international leader in the
development of advanced speech technology for various commercial applications
and products. Its three core technologies, automatic speech recognition,
text-to-speech and digital speech compression, are licensed to some of the
world's best-known companies in the telecommunications, computers and
multimedia, consumer electronics and automotive electronics industries. A
recipient of Byte magazine's Best Technology award at CeBIT 97, L&H offers its
full range of speech technologies on multiple platforms in multiple languages.
In addition, it offers translation services to information technology (IT)
companies, as well as vertical and automation markets. |
