Philips has sold its Philips Speech Recognition Systems (PSRS) to US-based Nuance Communications for €66m ($96.1m).

Nuance says the deal is strategic, about ensuring it has the technology, relationships and market strength to take the lead in a rapidly expanding European market. Two years ago the company bought Dictaphone, which made it number one in the US market. In Europe it had been number two to Philips.

As a result of the deal Nuance will add SpeechMagic to its existing portfolio of products, gain a customer base of over 8,000 customers, 100 integration partners and become the leading provider of health speech recognition systems in Europe.

Steven Steenhaut, senior marketing director for Nuance Europe, told E-Health Europe that the Philips product lines would be retained and developed: “This is a very strategic acquisition, we will add Philips Speech recognition products to the Nuance product line.” He added the deal was “not about buying revenue”.

As a result of the deal Steenhaut said Nuance would get access to key technologies, and vocabularies. “Philips had a lot of technology that we didn’t have.” The SpeechMagic brand and key speech recognition technology patents will be transfer to Nuance.

Steenhaut said PSRS’s extensive range of dictionaries and terminologies in different European languages were of particular value. “Nuance had 13 speciality vocabularies, Philips had many more.” Scandinavia will be one key areas that acquisition will help Nuance plug a previous language gap. “Philips had Danish, Finnish and Swedish which Nuance didn’t, and the market is really taking off in these Nordic countries.”

Headquarted in Vienna, Austria, PSRS is a business unit of Royal Philips Electronics and leader in speech recognition solutions, especially in the European healthcare market.

PSRS offers speech recognition solutions in 25 languages, the most comprehensive language portfolio in healthcare, to meet virtually all medical documentation requirements. The company sells its solutions througha network of more than 100 integration partners worldwide.

PSRS solutions can be used with healthcare IT applications found in hospitals, practices and other healthcare organizations, as well with medical transcription platforms. In addition, recent acquisitions in both Germany and Spain have further broadened its operations and capabilities for the European healthcare market.

Nuance says buying PSRS will make it the leading provdier of healthcare speech recognition solutions in Europe, with more than 8,000 installations and support for support for 25 languages. It also provides Nuance with a team of experienced sales, marketing, development and support personnel throughout Europe.

With the addition of the PSRS business Nuance says its combined healthcare business in North America and Europe should reach a projected turnover in excess of €292m ($410m). Nuance says the European market for automated documentation solutions may be worth up to €1.43 billion ($2 billion).

Steenhaus told EHE a rough estimate of the turnover of combined European operations would be in the range of €30-€40m.

“PSRS provides a solid foundation of customers, partners and European language-solutions as we expand our business in Europe and enable broader geographical leverage for Nuance’s portfolio of healthcare products and services,” said Paul Ricci, chairman and CEO at Nuance

“Together with Nuance and our broad partner base, we believe we can accelerate access to advanced, speech-enabled solutions that enhance the way medical reports are created and shared, as well as speed the utilization of electronic medical records.”

“With multiple industry initiatives and significant government investment toward healthcare information standardization, Europe offers a large and growing market for innovative technology that improves provider productivity and the clinical documentation process,” said Marcel Wassink, CEO of Philips Speech Recognition Solutions.

By buying PRSRS Nuance will get a much expanded language portfolio and speech recognition vocabularies. PSRS currently offers 25 continuous speech recognition languages and 150 specialty foreign language vocabularies.

Nuance will also gain Philip’s strong worldwide patent portfolio, primarily focused in the areas of speech recognition and associated workflow solutions. As a result Nuance predicts improvements in the accuracy of its speech based solutions.

A further key benefit of the deal will be to gain access to PRSR’s distribution channels, which span 100 integration partners worldwide. These include relationships with many of the largest healthcare IT vendors in the industry, including 3M Health Information Systems, Agfa Healthcare, Carestream Health, Dolbey, GE Healthcare, MedQuist, Microsoft, Philips Healthcare and Siemens Healthcare.

Nuance gains a strong customer base, with more than 8,000 SpeechMagic deployments. These include many UK NHS Trusts, several complete health regions throughout Spain, Norway, Denmark and Italy and hospitals in the Benelux, Germany, France, Sweden, Finland, Austria, the Middle East, Asia Pacific and Latin America.