Goldman Sachs & Co. LLC and Evercore are acting as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as counsel to Nuance.
Nuance Communications, Inc. (NASDAQ: NUAN) executed the spin off of its Automotive business segment into a new, independent, publicly traded company (“Nuance Auto”).
The standalone entity will be a pure-play, next-generation automotive software company. Immediately following the transaction, which is expected to be completed before the end of fiscal 2019, Nuance shareholders will own shares of both companies. The transaction is intended to be tax-free to Nuance shareholders. The automotive industry is evolving rapidly as new technologies transform the passenger experience through shared mobility, connectivity and enhanced driver assistance. Nuance is the market leader in voice recognition and cognitive assistants for car infotainment and communication systems and delivers critical enabling technology to help realize the future of mobility. Becoming an independent, publicly traded company represents an important step in Nuance Auto’s growth and the continued development of its conversational AI platform.
Nuance specializes in conversational AI technologies that help automotive manufacturers deliver connected and personalized experiences for drivers and passengers. Nuance Auto’s deeply integrated, customizable solutions power smart automotive assistants that are seamlessly integrated into the in-vehicle connected ecosystem. The business creates conversational experiences for virtually every 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 today in more than 200 million cars, with voice commands recognized in more than 40 languages. In fiscal year 2018, which ended September 30, 2018, the business generated $279 million in revenue, with 7% organic growth and 39% segment margin.
Nuance intends to appoint an independent management team and nominate members to a separate board of directors for Nuance Auto before the transaction is completed. Nuance expects the business will be headquartered in Boston and maintain a significant presence in Montreal and Aachen, Germany, among other global locations.
The spin-off is subject to numerous conditions, including, without limitation, final approval of the Nuance board of directors; the effectiveness of a Registration Statement on Form 10; and, the approved listing of Nuance Auto’s common stock on a national securities exchange selected by Nuance. Pursuant to the spin-off, Nuance plans to distribute shares of Nuance Auto common stock as a tax-free dividend to holders of Nuance common stock as of a record date to be determined by the board of directors of Nuance. The spin-off will not require a vote of Nuance shareholders.
Paul, Weiss advised Nuance Communications, Inc. with a team including corporate partners Steven Williams (Picture), Scott Barshay, John Kennedy and Gregory Ezring and counsel Caith Kushner and Patricia Vaz de Almeida; tax partners Jeffrey Samuels and Patrick Karsnitz and counsel Alyssa Wolpin; intellectual property partner Claudine Meredith-Goujon and counsel Jonathan Ashtor; employee benefits partner Lawrence Witdorchic and counsel Jason Ertel; litigation partner Lewis Clayton and counsel Peter Jaffe; and real estate partner Peter Fisch.
Involved fees earner: Steven Williams – Paul Weiss Rifkind Wharton & Garrison; Scott Barshay – Paul Weiss Rifkind Wharton & Garrison; John Kennedy – Paul Weiss Rifkind Wharton & Garrison; Gregory Ezring – Paul Weiss Rifkind Wharton & Garrison; Caith Kushner – Paul Weiss Rifkind Wharton & Garrison; Patricia Vaz de Almeida – Paul Weiss Rifkind Wharton & Garrison; Jeffrey Samuels – Paul Weiss Rifkind Wharton & Garrison; Patrick Karsnitz – Paul Weiss Rifkind Wharton & Garrison; Alyssa Wolpin – Paul Weiss Rifkind Wharton & Garrison; Claudine Meredith-Goujon – Paul Weiss Rifkind Wharton & Garrison; Jonathan Ashtor – Paul Weiss Rifkind Wharton & Garrison; Lawrence Witdorchic – Paul Weiss Rifkind Wharton & Garrison; Jason Ertel – Paul Weiss Rifkind Wharton & Garrison; Lewis Clayton – Paul Weiss Rifkind Wharton & Garrison; Peter Jaffe – Paul Weiss Rifkind Wharton & Garrison; Peter Fisch – Paul Weiss Rifkind Wharton & Garrison;
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