Nuance Communications Weighs Options for Automotive Unit

Updated on
  • Technology company is working with Evercore on review process
  • Nuance, CEO targeted by Neuberger Berman activist campaign

A sign outside of a facility occupied by Nuance Communications in Mahwah, New Jersey.

Photographer: Kristoffer Tripplaar/SIPA via AP 

Speech and imaging technology company Nuance Communications Inc. is considering strategic options for its automotive business, people with knowledge of the matter said.

Nuance is working with investment bank Evercore Inc. on the process, which could include selling part or all of the business, said the people, who asked not to be identified because the details aren’t public. The company, which has held talks with private equity firms, could receive as much as $1.5 billion in a sale, the people said.

No deal has been reached and it’s possible Nuance might keep the business, they said.

Representatives for Evercore and Burlington, Massachusetts-based Nuance declined to comment.

Shares of Nuance rose as much as 3.2 percent Tuesday. They were up 2.1 percent to $17.47 at 3:17 p.m. in New York trading.

Nuance, which helped develop Apple Inc.’s Siri voice-activated software, is under pressure from asset manager Neuberger Berman Group to remove Chairman and Chief Executive Officer Paul Ricci. The sometimes activist investor’s proposals in a December letter included appointing a new independent interim chairman and replacing the chairman of its governance committee. Billionaire investor Carl Icahn, who had previously targeted the company, sold his stake in it last year.

Also in December, Ivory Investment Management, which said it owned 1.6 percent stake in Nuance, urged the company to quickly sever ties with Ricci and name a successor. On Monday, Fairpointe Capital, according to Reuters, expressed concerns over Nuance’s board and CEO succession.

The automotive business sits within Nuance’s mobile division, accounting for about 63 percent of the unit’s revenue, and is growing at a double-digit rate, according to the company’s fourth-quarter earnings report. Other Nuance divisions include a health-care unit, which provides dictation and transcription software for medical information management.

— With assistance by Alex Webb

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