Medical transcription services and software vendor Nuance Communications will acquire transcription firm Transcend Services for approximately $300 million.

The acquisition will expand Nuance’s medical transcribing and editing capacity and bring in more than 320 small to mid-sized hospitals and delivery systems, with very little customer overlap. Nuance will market its dictation, speech recognition and natural language processing technologies to Transcend clients.

Nuance’s natural language processing technology extracts text or voice information and converts it into discrete data. The technology enables a computer to read and understand text and abstract data, according to the company. For instance, if a dictation describes a gall bladder inflammation, this can be interpreted as the medical term “cholecystitis” so that the patient record accurately reflects the diagnosis.

Nuance now will pick up additional information technology capabilities via the acquisition: Transcend Services in 2011 acquired Salar Inc., which sells electronic documentation and charge capture software. The products enable electronic inpatient documentation that can generate an appropriate CPT code and integrate to an electronic health record, capture charges at the point of care and integrate to billing systems, enable inpatient coders to query physicians and get responses, and automate patient handoff lists.

The $29.50 per share price for Transcend is 30 percent above the company’s average price over a 90-day period. Nuance expects Transcend will add $140 million to $150 million in revenue during fiscal 2013 and GAAP earnings per share of 2 to 3 cents.

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