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Technology Stocks : Nuance Communications, Inc.

NUAN 54.84

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Aug 11 5:00 PM EST

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From: JakeStraw	2/8/2006 8:05:56 AM
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Nuance Buying Dictaphone biz.yahoo.com TheStreet.com Wednesday February 8, 7:28 am ET By TSC Staff, Nuance (NasdaqNM:NUAN) agreed to pay $357 million in cash for Dictaphone. Burlington, Mass.-based Nuance said the deal "expands Nuance's product portfolio, market reach and revenue streams within the large and rapidly growing healthcare vertical." Nuance expects the acquisition to cut earnings by 11-12 cents a share for 2006 and by 2-5 cents a share for 2007. On a pro forma basis, excluding amortization, acquisition costs and stock-based compensation, the deal will add 2 to 3 cents to 2006 earnings and 6 to 9 cents to 2007 earnings. The addition of Dictaphone should add $80 million to $85 million to 2006 revenue and around $190 million to 2007 revenue. So-called cost synergies are targeted at $20 million to $25 million. "Improvements in speech technology and pressures on the healthcare industry create a compelling opportunity for our companies to transform manual transcription through speech-enabled solutions," said CEO Paul Ricci. "The combined resources, experience and talents of Nuance and Dictaphone will help accelerate the adoption of speech recognition to eliminate most manual transcription for healthcare in North America this decade, delivering over $5 billion in savings to care facilities and transcription service organizations." Nuance has obtained a commitment for a new senior secured credit facility from UBS Investment Bank, Credit Suisse, Citigroup and Bank of America to finance the transaction. The facility comprises a $355 million term loan and a $75 million revolving credit facility.

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