Apple Likely Partnering, Not Purchasing Nuance

May 11, 2011
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Apple Likely Partnering, Not Purchasing Nuance

There has been all sorts of speculation around the web about whether Apple will shell out some of the pile of excess cash it has laying around and purchase Nuance. And last year, Steve Wozniak made a big flub and speculated that Apple would buy Nuance, later retracting his statement. But a move yesterday by Nuance to make an acquisition itself casts doubt on a purchase of the company by Apple.


One of Nuance's major strengths is in its speech recognition software, and the speculation has been that Apple may decide to buy the company in order to improve the speech recognition capability of iOS. Nuance's acquisition of Equitrac, a print management firm, makes it look unlikely that Nuance is preparing to be purchased by anyone. Any deal they do with Apple will be a partnership, not an acquisition.

With this move, Nuance is looking to expand another aspect of its business, which is document imaging. Nuance also has a huge healthcare business, something Apple isn't interested in. According to obert Weideman, senior vice president and general manager of the Nuance Document Imaging Division, “Equitrac delivers proven value in healthcare, financial, legal and educational organizations, and provides secure print capabilities to desktop and mobile global office workers. This complements Nuance’s strengths in mobile and office productivity, and aligns well to Nuance’s key verticals, especially healthcare.”

So Nuance has made it clear that they are staying independent, and are growing other areas of their business in addition to the speech recognition side. It will be interesting to watch what, if any, deal happens between Nuance and Apple in the near future. Apple and iOS could benefit from Nuance's expertise.

Press release:

Nuance Communications, Inc. (NASDAQ: NUAN) today announced an agreement under which Nuance will acquire Equitrac Corporation, a leading provider of intelligent print management and cost recovery software. Equitrac solutions have been adopted by more than 25,000 organizations worldwide to implement secure and managed printing for enterprise, global and mobile workforces.

The acquisition expands Nuance’s document imaging portfolio, adding Equitrac’s market-leading print management products to Nuance eCopy ShareScan® scanning and workflow solutions, and to Nuance OmniPage, PaperPort and PDF Converter Professional desktop applications. The addition of Equitrac also strengthens Nuance’s global channel partnerships with multifunction printer (MFP) vendors, including Canon, Xerox, Konica Minolta, Ricoh and HP – each of whom currently sell both Equitrac print management and Nuance eCopy scanning solutions through their dealers or as part of their Managed Print Services (MPS) portfolios.

“Equitrac expands our ability to provide our customers and MFP partners with solutions that deliver even higher levels of cost savings and office productivity,” said Robert Weideman, senior vice president and general manager of the Nuance Document Imaging Division. “Equitrac delivers proven value in healthcare, financial, legal and educational organizations, and provides secure print capabilities to desktop and mobile global office workers. This complements Nuance’s strengths in mobile and office productivity, and aligns well to Nuance’s key verticals, especially healthcare.”

Equitrac increases the productivity and document security of office workers with the Follow-You® printing solution. Users print documents from their desktop as usual, then use card-swipe or log-in identification at a networked MFP to view and select their documents for on-demand printing. No matter where they go in their organization – an MFP around the corner from their office or at office locations across the globe – the user’s personalized on-demand document selections are instantly available from the MFP touch-screen. In a hospital setting for example, care providers can securely access and print standardized forms or specific patient reports from any MFP or printer on the network – a nurse’s station, physician’s office or emergency room.

“There’s a long history of customers selecting Equitrac as their MFP print management solution and Nuance eCopy as their MFP scanning solution. From day one, the combination of Nuance and Equitrac delivers the best of scanning and best of print management to our customers and partners worldwide,” said Michael Rich, president and CEO, Equitrac Corporation. “Even better, Nuance’s leadership in speech recognition, healthcare solutions and intelligent touch-screen interfaces provide a fertile ground for innovations that promise to deliver breakthrough increases in cost savings and office productivity.”

The combination of Nuance and Equitrac results in:

Products that Increase Cost Savings and Office Productivity – Nuance eCopy and Equitrac solutions are both integrated with the touch-screens of MFP devices, and are leading solutions for automating and optimizing document processes within organizations of every size. Customers need and want both secure print and scanning solutions; an estimated 25 percent of Nuance eCopy installations already have print management software – many of them from Equitrac. In addition to providing an integrated offering, Nuance will continue to offer eCopy and Equitrac as standalone products that support both print and scan partners, such as NTware, NSi, Omtool, GlobalScan and SafeCom.

Strengthening of Global OEM Partnerships – Nuance has strong revenue-based channel relationships with Brother, Canon, HP, Kodak, Konica Minolta, Ricoh, Visioneer, Xerox and more. Equitrac has strategic ties with HP, Konica Minolta, Ricoh, and Xerox – and expanding relationships with Canon, Fuji-Xerox, Lexmark, Samsung and more. The combination of Nuance and Equitrac will provide the OEM community with the largest and most experienced team dedicated to providing MFP partner sales, professional services, support and customer service worldwide.

Unmatched Application Connectivity – Nuance and Equitrac are leaders in connecting MFPs to back-end enterprise applications. Nuance eCopy connects to over 200 applications, including content management, database and financial software. Equitrac connects to over 50 cost recovery, auditing and financial systems, expanding Nuance’s capabilities to include support for important enterprise applications such as SAP and others.

Expanded Solutions for Key Verticals – Equitrac has significant penetration in healthcare, finance, legal, government and educational vertical markets, providing a strong complement to Nuance’s strong position in finance, legal, education, government and especially healthcare, where Nuance solutions are used in over 4,000 hospitals and by over 100,000 care providers.

Innovation in Managed Print Services

As the office equipment industry continues the migration to a services-led delivery model for printing and document processing, Equitrac and Nuance document imaging solutions are important components of ensuring OEM success in the MPS market. The integration of Equitrac with Nuance eCopy will provide innovative, integrated, cross-platform MFP-based document solutions to deliver on the promise cost reductions that will drive the adoption of MPS solutions across enterprises.

Under the terms of the agreement, consideration for the transaction is $157 million in cash. The transaction is expected to close late in the fourth quarter of Nuance’s fiscal year 2011, ending September 30, 2011. Nuance expects the acquisition in fiscal 2012 to add between $58 million and $60 million in non-GAAP revenue; $27 million and $29 million in GAAP revenue after adjusting revenue lost to purchase accounting; non-GAAP earnings between $0.04 and $0.05; and a GAAP loss between $(0.05) and $(0.06). See “Discussion of non-GAAP Financial Measures” below for further information.

About Equitrac Corporation

Equitrac Corporation is the global leader of intelligent print management and cost recovery software solutions for the corporate, legal, education, healthcare and financial services markets. Equitrac’s solutions are mission critical to all enterprises that are looking to more effectively manage their printing environments, reduce printing costs, increase security and lessen their environmental impact. The company is backed by an unmatched R&D program and is a preferred technology partner with all leading providers of multifunction devices. Equitrac is has been in business for 30 years and has more than 25,000 customers in 70 countries. Equitrac’s solutions are deployed in Global 500 companies, AMLAW 200 legal firms, and leading colleges, universities and school districts. For more information, visit www.Equitrac.com.

Nuance Communications, Inc.

Nuance Communications, Inc. (NASDAQ: NUAN) is a leading provider of speech and imaging solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with information and how they create, share and use documents. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.Nuance.com.

[via Nuance]


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