Nuance Communications, Inc., a leading provider of speech solutions, today announced a definitive agreement whereby Nuance will acquire Focus Infomatics, Inc., the premier healthcare speech recognition editing services organization.

This acquisition will expand Nuance's ability to deliver Web-based speech recognition editing services and significantly accelerate Nuance's strategy to automate manual transcription in healthcare, where an estimated $15 billion is spent worldwide each year. Focus' proven technology and services portfolio, in conjunction with the Dictaphone iChart Web-based transcription solutions, will ensure the most efficient and scalable Internet delivery of automated transcription as a service.

Focus Infomatics is one of the most respected speech recognition services organizations in healthcare, serving some of the U.S.'s largest healthcare organizations such as Ardent Healthcare, MD Anderson Cancer Center and Brigham and Women's Hospital. The company combines the use of speech recognition, a Web-based editing platform and an optimized India-based operation to achieve superior customer satisfaction, turnaround time and cost efficiency. Focus' practices have garnered the industry's highest customer satisfaction as evidenced by its 2006 Best in KLAS® ranking by KLAS Enterprises, an independent organization that monitors performance of healthcare vendors worldwide.

"The pressing requirement for automation in the healthcare industry presents a significant opportunity for the adoption of Nuance speech-enabled solutions," said Paul Ricci, chairman and CEO at Nuance. "In particular, Focus' outstanding reputation for speech editing services and highly skilled workforce will support the rapid growth of iChart, our hosted speech-enabled transcription service. By combining Nuance's premier speech technology and Focus' proven services, we expect to accelerate our objective to eliminate manual transcription."

Nuance expects the acquisition to add between $7 million and $9 million in Dictaphone healthcare revenues in fiscal year 2007 and between $18 million and $22 million in fiscal year 2008. The acquisition is expected to be dilutive to earnings on a GAAP basis by approximately $(0.02) to $(0.01) in fiscal year 2007 and $(0.01) to $0.00 per share in fiscal year 2008. On a non-GAAP basis, the acquisition is expected to be accretive to earnings, excluding amortization, acquisition-related costs and stock-based compensation, by approximately $0.00 to $0.01 per share in fiscal year 2007 and $0.02 to $0.03 per share in fiscal year 2008.

The acquisition was funded with cash. Consideration after adjustments is approximately $58 million. The acquisition has been approved by both companies' Boards of Directors and is expected to close by March 31, 2007, subject to customary conditions.

"It is clear that speech recognition is now an essential component of medical dictation and transcription as the healthcare industry drives toward efficiency and automation," said Anirudh Baheti, CEO of Focus Infomatics. "Focus' customers have benefited substantially from speech technology for some time and our combined offerings fit naturally with the way doctors and medical practitioners work. We are delighted to join Nuance as the company has quickly become the industry leader for end-to-end healthcare transcription solutions" - Nuance.