Nuance Communications buys speech recognition unit

Nuance bought the unit in order to expand its presence in the European health care market.

Under the deal, Netherlands-based Royal Philips received a payment of 21.7 million euros on Sept. 26 and will receive 44.3 million euros in a deferred payment on Sept. 21, 2009. Nuance said the deal will add between $36 million and $39 million in revenue in 2009, and now expects revenue to reach $410 million. The buyout will add up to 1-cent per share in profit.

The addition of the speech recognition unit, Nuance said, enhances the company's ability to provide documentation and communication services to health care organizations throughout Europe. It said about $2 billion is spent annually in Europe for health care companies to manually process clinical information.

Shares of Nuance closed at $12.19 Tuesday and added $1.06, or 8.6 percent, in premarket trading.