Nuance Communications is selling its Document Imaging division to Kofax for $400 million.
The sale will let Nuance to “simplify” the organisation and allow it to focus on conversational AI and cloud-based solutions, while Kofax’s on-boarding of the division will bolster its intelligent automation technologies.
The deal, subject to closing conditions, is expected to close by the end of Nuance’s second fiscal quarter, which will be in March next year.
“Nuance is entering the next phase of our organisation’s growth and while selling the Document Imaging division was not an easy decision given its many years of contributions and dedication of our Imaging associates, it became clear in our portfolio reviews that this is the right outcome,” said Nuance CEO Mark Benjamin.
“Selling the Imaging division allows us to sharpen focus on our conversational AI- and cloud-related portfolio and accelerate the transformation well underway at the company.”
CEO of Kofax, Reynolds Bish, added: “Through the acquisition of Nuance’s Document Imaging division, Kofax will drive customer value by adding key technologies, including cloud compatibility, scan-to-archive, scan-to-workflow, print management, and document security, to our end-to-end Intelligent Automation platform.
“In addition, we will now be able to combine the best capture capabilities available in the market into one product portfolio.”
Nuance is due to reveal its Q4 results on November 19, during which additional details on the purchase will be discussed.
Nuance Document Imaging Sale Part of “Refocusing Key Strengths”
Nuance has provided AI, speech recognition and image processing software to clients including Samsung, Audi, and Roku, as well as Apple for its Siri assistant.
Nuance Document Imaging provides software that helps companies automate and secure their information-based capture and print processes, across multi-function printers, printers, desktops, and mobile devices.
Kofax provides software both in the cloud or on-prem for robot process automation, business process management, multichannel capture for clients across financial services, insurance, government, healthcare, and supply chain markets, among others.
More than six million knowledge workers use the Document Imaging division’s capture and workflow solutions, and Kofax said the purchase of the division will turn it into the global leader in capture and print management.
In its Q3 results, Nuance revealed GAAP net loss of $14 million. Document Imaging accounted for 11 percent of total revenue, way behind its healthcare and enterprise divisions.
At the time, Benjamin spoke of turning the company into a more efficient business, with resources focused on “opportunities that leverage Nuance’s core strengths in key vertical markets”, foreshadowing the Document Imaging sale.
“As we move through our process, we will identify and prioritize the solutions, the technology and the markets where we are significantly differentiated and where there is the greatest opportunity,” he said.
“We are also exploring ways to extract value from aspects of our business that while still attractive, we may decide are ultimately outside of our core strengths and focus.”