Microsoft reported on Monday that it would purchase Nuance Communications, a speech recognition firm, for $56 per share, up 23% from its Friday closing price. The transaction is valued at about $16 billion, with a total value of about $19 billion when debt is factored in.
It's the latest indication that Microsoft is looking to expand by acquisitions.
The business is also rumored to be in talks to buy Discord, a popular chat app, for about $10 billion. Furthermore, Microsoft attempted to purchase TikTok's U.S. company for about $30 billion last year, but the transaction fell through.
Since purchasing LinkedIn for more than $26 billion in 2016, Microsoft's biggest acquisition has been Nuance. Microsoft completed its $7.6 billion purchase of gaming company Zenimax last month.
Nuance's stock rose 15.95 percent in Monday's trading session. Microsoft's stock was marginally higher.
Nuance will fit in with Microsoft's business unit that caters to companies and governments. Nuance makes money by selling speech recognition and transcription software for doctor's appointments, customer service calls, and voicemails. Microsoft stated in its announcement that Nuance's technology would be used to supplement Microsoft's cloud health care products, which were launched last year.
Microsoft CEO Satya Nadella cited Nuance's health-care software as a primary catalyst for the acquisition in an interview on CNBC's "Squawk on the Street" on Monday.
"We've seen a huge acceleration in digital transformation... particularly in health care," said Nadella. "When it comes to the supplier market, new technology will be critical."
Nuance's voice recognition technology has a good reputation, and it has been a priority for acquisition by companies such as Apple, Microsoft, and others for many years. Many of Microsoft's products still have voice recognition built in, but the company recently discontinued some of its Cortana-based products.