Earlier this week, Irvine-based software provider Kofax formally announced their intent to acquire Nuance Document Imaging (NDI) in a reported $400 million deal.
A couple of days prior to the announcement, rumors swirled that Nuance Communications, Inc. was very close to divesting its imaging division, as they seek to double up efforts in their artificial intelligence (AI)- and cloud-based solutions (after all, Nuance's voice recognition services once helped to power Apple's digital assistant Siri).
For Kofax, this deal helps to cement their leadership position in the capture software market, especially in light of OpenText's aggressive movement in their cloud capture services (only bolstered by their 2017 acquisition of EMC Captiva and newly launched software-as-a-service platform OT2). Adding the key technologies from Nuance Document Imaging provides capabilities like cloud compatibility, enhanced scan-to-archive, scan-to-workflow, print management, and document security. This combination strengthens Kofax’s end-to-end document management capabilities throughout the document life cycle from creation to disposition.
As of late, Kofax has been promoting their intelligent automation platform, which bundles robotic process automation (RPA) with what they term “smart automation” capabilities. These capabilities include mobile capture and intelligent optical character recognition (OCR), workflow orchestration, advanced analytics, digital messenger, and e-signature.
"While Kofax is leading their communications with Kapow RPA, their major source of revenue is still mostly back-office capture solutions," says Mike Spang, Vice President of Research at Harvey Spencer Associates.
According to Nuance, they claim that over six million knowledge workers use their capture and workflow solutions, with another 100,000 active deployments of its print management solutions. While Nuance had been experiencing some recent decline, renewed growth in revenue and the installation of new CEO Mark Benjamin in March led many analysts to predict a shake-up of their imaging division. For Kofax's part, this announcement follows their own acquisition by equity firm Thoma Bravo from Lexmark International Inc., which resulted in Kofax being spun off into an independent Thoma Bravo portfolio company in 2017.
When looking at both Kofax and Nuance Document Imaging, it's clear that this acquisition not only fills the product gaps from both companies, but it also positions Kofax as an overall global leader in capture and print management.
Both organizations have specifically designed solutions targeting key business process areas like invoice processing, medical transcription, electronic health records (EHR), and more in industries that include healthcare, automotive, financial services, government, education, legal, and utilities. The joining of these companies delivers a well-rounded set of tools and a solid platform upon which businesses can build out their automation capabilities and expand their digital workforce.
The deal is expected to close in the first quarter of 2019.
Bob Larrivee is a recognized expert in the application of advanced technologies and process improvement to solve business problems and enhance business operations. He reports on the latest information management technologies for DOCUMENT Strategy. Follow him on Twitter @BobLarrivee or visit boblarriveeconsulting.com.