Warburg Pincus has made a $175 million investment in Nuance Communications, a provider of speech and image technology, that will be used for potential future acquisitions.
Warburg, a global private equity firm, will buy more than 17 million shares of Nuance common stock in the deal at a price of $10.06 per share. The firm also will get a warrant to buy 3.8 million shares of the company’s stock upon closing the deal at a price of $11.57 per share and a four-year term.
As part of the deal, Warburg has agreed not to sell any shares of Nuance common stock for six months after finalising the deal, which is expected in February.
Warburg is a major investor in Nuance and took a large stake in the company after the 2005 merger of Nuance with image technology company ScanSoft in a $221 million deal.
Warburg has a long history of investing in technology companies. In July, the firm hired former president and chief executive officer of About.com Scott Meyer as an entrepreneur-in-residence in the technology, media and telecom practice.
The firm has invested more than $10 billion in technology, media and telecommunications, including investments in Nuance, payment technology provider Metavante and NeuStar, a provider of clearinghouse services for the communications industry.
Warburg has about $30 billion under management, including $10 billion for investment in technology, media, telecom, consumer, industrial and healthcare. Warburg is a growth investor and has raised 12 private equity funds that have invested more than $29 billion in about 600 companies in 30 countries.
Warburg closed its 10th global fund on $15 billion in April, surpassing its $12 billion target.