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Lernout buys U.S. rival
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March 28, 2000: 3:55 a.m. ET
Belgian speech technology firm buys private Dragon Systems for $593M
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LONDON (CNNfn) - Belgium speech-recognition company Lernout & Hauspie Speech Products agreed Tuesday to buy Dragon Systems of Newton, Mass., for $593 million to increase its reach in the markets for speech-based software in mobile phone and hand-held devices.
Lernout will acquire privately held Dragon, a speech and language technology company, for 5.45 million shares. Lernout shares surged 10.3 percent to $120.80 on the Brussels-based Easdaq exchange in Europe Tuesday morning. The stock is also traded on the U.S. Nasdaq market, where they closed at 108 3/4 Monday.
Lernout said it expects the acquisition to be "slightly accretive" to its earnings, excluding the writeoff of goodwill, during the second half of 2000 and to contribute much more strongly after that. Dragon Systems had revenues of approximately $60 million and a net loss of about $22 million for its fiscal year 1999.
"Dragon Systems is a speech industry leader well known for its technology breakthroughs and its award-winning dictation products," Lernout & Hauspie Chief Executive Gaston Bastiaens said.
Both companies develop technology to allow devices such as PCs to recognize and accept spoken commands in several languages.
Lernout has grown by acquisition, buying more than 15 companies since 1996. Earlier this month, the Belgian company bought closely held Dictaphone of the U.S. for $912 million. Dictaphone makes dictation and voice management equipment and software used in fields such as medicine and education. 
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Lernout & Hauspie
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