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Burlington’s Nuance reportedly in sales talks with Samsung

Electronics giant is a customer of its speech technology

Could Nuance Communications Inc. be up for grabs — again?

The Burlington maker of speech- recognition software has talked with several possible buyers, including Samsung Electronics Co., The Wall Street Journal reported Monday.

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A spokesman for Nuance, Richard Mack, declined to comment.

Nuance has previously been the subject of acquisition rumors. At one time, analysts who follow the company speculated that Apple Inc. might buy Nuance, whose speech- recognition technology powers its Siri virtual assistant on the iPhone.

“For the last five years, they’ve always been front and center as an acquisition candidate,” said Daniel Ives, an analyst at FBR Capital Markets in New York. “There was a time when IBM was going to buy them.”

The company has emerged as a leader in the fast-growing market for voice-recognition products. Its software is showing up in many new cars, TV sets, and smartphone apps.

Last year, Nuance attracted the interest of activist investor Carl Icahn, who now owns a 19 percent stake in Nuance and has placed two allies on its board. But even with Icahn on board, Nuance has struggled on Wall Street; its stock is down about 12 percent in that time.

In many ways, Ives said, a deal with Samsung would make sense for Nuance.

The South Korea electronics giant is already a large customer and uses Nuance’s speech technology in its TV sets, tablets, smartphones, and wearable devices.

“They are close partners,” Ives said. “They have unique speech-recognition technology, which is something that Samsung is trying to build their technology around.”

But Samsung would not have much use for the other parts of the Nuance business, Ives said, such as its large business units that provide hospitals with medical transcription services and businesses with call center technology.

Samsung and Apple, however, are locked in a fierce rivalry, and owning Nuance technology could give the South Korean company a leg up, said John Bright, a senior technology analyst at Avondale Partners, a Nashville investment firm.

“The only reason Samsung would buy Nuance is to strategically block Apple,” Bright said. “In the hardware chess match, this would potentially give them a software differentiating component.”

It would also be a costly move, Bright pointed out.

News of a possible Samsung deal caused Nuance’s stock to shoot up 9.7 percent to $18.76 on Monday, giving the company a market capitalization of about $6 billion.

Those kinds of prices have not stopped other recent tech deals. The volume of acquisitions is down 27 percent this year, compared to last, but the amount being paid has jumped 235 percent, according to PrivCo, a New York financial data provider on privately held companies.

That bump is being led by companies such as Google, which paid $3.2 billion to buy the smart thermostat maker Nest Labs, and Facebook, which spent $16 billion for the mobile messaging service WhatsApp.

Historically, Nuance itself has been known as an aggressive acquirer. In 2012, for instance, it bought a Cambridge voice-recognition competitor, Vlingo, for $200 million.

Michael B. Farrell
can be reached at michael.farrell@globe.com. Follow him on Twitter @GlobeMBFarrell.
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