Nuance Communications is planning to spin off its Automotive operations. Nuance Auto will be an independent, publicly traded pure-play, next-generation automotive software company, focused on developing its conversational AI platform. Nuance recently sold its Document Imaging division so that it could focus on AI and the cloud. This latest spin-off will see it narrow its focus even further, into core growth opportunities in Healthcare and Enterprise. The spin-off should complete before the end of fiscal 2019. Nuance shareholders will then own shares in both the new and old company.
Nuance intends to appoint an independent management team and to nominate members to a separate board of directors for Nuance Auto before the move closes. Nuance expects the new company to be headquartered in Boston and to keep its presence in Montreal and Aachen, Germany, among other global locations.
The Nuance Auto operations create conversational AI technologies that help automotive manufacturers deliver connected and personalized experiences for drivers and passengers. These systems are then integrated into the in-vehicle connected ecosystem. The division already serves a number of major automotive manufacturer, including Audi, BMW, Daimler, Fiat, Ford, GM, Hyundai, SAIC and Toyota, as well as virtually every major tier-one automotive supplier. Nuance Auto products ship in more than 50 million new cars each year and can be found in over 200 million cars, with voice commands recognized in more than 40 languages. In fiscal year 2018, which ended September 30, 2018, the business generated USD 279 million in revenue, with 7 percent organic growth and 39 percent segment margin.
The transaction is intended to be tax-free to Nuance shareholders. It is subject to some conditions, including final approval by the Nuance board of directors and the approved listing of Nuance Auto shares. There will however be no need for a vote by Nuance shareholders.
