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Takeover time ahoy ! Nuance to acquire Equitrac

Nuance Communications (which in recent years has been buying up everything that is not nailed down although the eCopy and Dragon Dictation businesses are probably its best known products in the legal market) has announced an agreement
under which Nuance will acquire Equitrac Corporation, a leading provider
of print management and cost recovery software. 

The acquisition expands Nuance’s document imaging portfolio, adding
Equitrac’s print management products to Nuance eCopy
ShareScan scanning and workflow solutions, and to Nuance OmniPage,
PaperPort and PDF Converter Professional desktop applications. The
addition of Equitrac also strengthens Nuance’s global channel
partnerships with multifunction printer (MFP) vendors, including Canon,
Xerox, Konica Minolta, Ricoh and HP – each of whom currently sell both
Equitrac print management and Nuance eCopy scanning solutions through
their dealers or as part of their Managed Print Services (MPS)

“Equitrac expands our ability to provide our customers and MFP partners
with solutions that deliver even higher levels of cost savings and
office productivity,” said Robert Weideman, senior vice president &
general manager of the Nuance Document Imaging Division. “Equitrac
delivers proven value in healthcare, financial, legal and educational
organizations, and provides secure print capabilities to desktop and
mobile global office workers. This complements Nuance’s strengths in
mobile and office productivity, and aligns well to Nuance’s key
verticals, especially healthcare.”

“There’s a long history of customers selecting Equitrac as their MFP
print management solution and Nuance eCopy as their MFP scanning
solution. From day one, the combination of Nuance and Equitrac delivers
the best of scanning and best of print management to our customers and
partners worldwide,” said Michael Rich, president & CEO, Equitrac
Corporation. “Even better, Nuance’s leadership in speech recognition,
healthcare solutions and intelligent touch-screen interfaces provide a
fertile ground for innovations that promise to deliver breakthrough
increases in cost savings and office productivity.” 

Under the terms of the agreement, consideration for the transaction is
$157 million (£96m) in cash. The transaction is expected to close late in the
fourth quarter of Nuance’s fiscal year 2011, ending September 30, 2011.
Nuance expects the acquisition in fiscal 2012 to add between $58 million
and $60 million in non-GAAP revenue; $27 million and $29 million in GAAP
revenue after adjusting revenue lost to purchase accounting; non-GAAP
earnings between $0.04 and $0.05; and a GAAP loss between $(0.05) and

Comment: Equitrac was one of the founders of the cost recovering business, with its dedicated terminals becoming a regular addition to photocopiers in law firms from the mid-1980s onwards. However in later years it has seen Copitrak win much of its traditional business outside the US and more recently was wrong-footed by the shift away from dedicated hardware terminals to embedded systems, with companies like nQueue Billback taking the lead in product innovation. Michael Rich deserves credit for reinventing Equitrac and preventing what could have been a train wreck when the hardware bubble burst and we now wait to see what Nuance will do with the business.