ScanSoft, SpeechWorks to Merge

Automation software vendor ScanSoft said today that it would buy SpeechWorks International in an all-stock transaction valued at about $132 million.

Under the terms of the agreement, ScanSoft will issue approximately 32.6 million shares of its common stock to SpeechWorks shareholders, who will receive 0.860 shares of ScanSoft common stock for each share of SpeechWorks stock that they own. Based on the average closing price for the companies' shares during the last 30 days, the premium paid is about 63 percent.

The combined company will deliver, among its various products, voice-enabled directory assistance as well as other voice recognition applications for carriers. Though the companies would not discuss specific technology integration going forwarded, they likely will integrate the voice recognition, text-to-speech and speaker verification capabilities.

Two areas where the acquisition will help ScanSoft is in driving service revenue and expanding the addressable market, said Paul Ricci, chairman and CEO of ScanSoft.

“One of the assets that SpeechWorks has that attracted us is the evolution of their own sales organization toward vertical markets,” he said “We also became convinced that having a professional services organization to support both your partners and the enterprises that ultimately use the product was essential.”