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Kurzweil Applied Intelligence Inc. of Waltham yesterday agreed to be acquired for about $53 million by Lernout & Hauspie Speech Products N.V. of Belgium.
The deal is intended to let the Belgian company gain a stronger presence in the emerging speech-dictation and medical markets.
It also would provide an infusion of cash to money-losing Kurzweil, a speech-recognition software company that was rocked by scandal last year when its former president and vice president of sales were sentenced to prison terms after being found guilty of conspiracy, securities fraud, and falsifying company records.
Raymond Kurzweil, company founder and chief technical officer, will remain a consultant to the combined company. He was unavailable for comment yesterday.
The transaction values Kurzweil at $5.25 a share. Lernout &Hauspiesaid the transaction is expected to be nondilutive to its 1997 earnings and will be completed within a few months after Kurzweil stockholders approve the deal.
Lernout &Hauspie,a voice-recognition company based in Ieper, Belgium, with US headquarters in Burlington, said 80 percent of the purchase price will be paid in cash. The remaining 20 percent will be in newly issued shares of Lernout &Hauspie.
``Buying Kurzweil A.I. gets us quicker into certain application markets, plus they [Kurzweil] have a direct sales channel and products for the retail market,'' said Koen Bouwers, Lernout &Hauspiecorporate senior vice president and president of the dictation division. ``Kurzweil A.I. will get technology, money, and an international presence,'' he added. He said both companies will combine their technologies and resources to pursue the next frontier in voice recognition - continuous-speech dictation.
The acquisition is also expected to help Kurzweil further develop voice-enabled word processing systems and expand its presence in the medical reporting field, where its software lets physicians dictate notes and create reports.
``We expect this acquisition will accelerate the development of our new continuous-dictation technology and create additional opportunities for us to reach a worldwide market with our product offerings,'' said Tom Brew, Kurzweil president and chief executive, in a statement. Dow Jones reported that Brew is expected to leave the firm after the deal is closed.
Yesterday, Kurzweil shares closed at 4 3/16, up 1 3/16, while Lernout &Hauspie shares closed down 1 to 19 1/8, both on Nasdaq.
This story ran on page c2 of the Boston Globe on 04/16/97.
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