The deal is worth about $35 million, including $17 million in cash and $18 million in Nuance stock. The value represents a 73% premium on the closing price of Zi's stock.
In a statement, Nuance said that with Zi's technologies it will be able to offer additional tools for mobile users to interact with their phones. Zi will also allow Nuance to better meet demands for text input technology, particularly in the Asia-Pacific region, the company said.
Zi's technologies include handwriting recognition, predictive text and spell check. It also offers a technology called Qix that searches for stored content on a phone as a user types a word or number in the phone. For example, a user could start to dial a number and Qix would find and display the number from the phone's contact list. The user could then select the full number from the contacts list rather than continuing to type it in.
The companies have some overlapping technologies, because Nuance already offers T9 predictive text. T9 was one of the first mobile predictive text technologies. It was developed by Tegic, a company Nuance bought from AOL in 2007.
Zi's board of directors recommends that shareholders approve the offer, and they've scheduled a special meeting in April when shareholders can cast their votes. With shareholder and court approval, the transaction should close in Nuance's third quarter, which ends in June, the companies said.
Nuance is based in Burlington, Mass., and Zi in Calgary, Alberta.