Nuance buys rival speech-rec vendor for $140M

Nuance Communications Inc. said it will spend $140 million to acquire BeVocal, a fellow developer of speech-recognition software.
Nuance announced plans to issue roughly 8.3 million common shares and spend $15 million for BeVocal, which offers speech-based customer care solutions to wireless companies. The Burlington, Mass.-based Nuance expects the acquisition to add between $21 million and $23 million in revenue in 2007 and as much as $70 million next year.
“The growth of the mobile industry, coupled with the value of speech as a means of accessing information and services in this environment, presents a great opportunity to expand the presence of Nuance solutions in the mobile market,” said Nuance CEO Paul Ricci. “BeVocal’s intellectual property, solutions expertise and established carrier relationships will expand our ability to serve this growing market.”
The acquisition underscores the growing interest in speech-recognition technology, which may finally be getting legs in mobile. Behemoths such as Google Inc. are getting into the speech-recognition game, competing against startups such as VoiceSignal Technologies and V-Enable Inc., hoping to entice wireless customers to use their voices to access content and navigate cumbersome carrier decks. Promptu, another player in the space, recently pocketed $5.6 million in funding on the heels of an $11.6 million venture capital funding round in September.
BeVocal was founded in 1999 and has snared more than $80 million in venture capital. Cingular Wireless L.L.C., Liberty Wireless, Metro PCS and Virgin Mobile USA are among the carriers that use BeVocal software for customer relationship management and content sales efforts.
Nuance shares dipped 15 cents to $14.83 following the announcement.