Global private equity firm Warburg Pincus plans to acquire 7 per cent of Speech and imaging solutions provider Nuance Communications for $175 million.

A leading investor in technology companies, Warburg Pincus  has agreed to purchase 17,395,626 shares of Nuance common stock at a purchase price of $10.06 per share, for an aggregate investment of $175 million.

Warburg Pincus will also acquire a warrant to purchase 3,862,422 million shares of Nuance common stock upon the closing of the investment, which has an exercise price of $11.57 per share and a four-year term.

Warburg Pincus has also agreed not to sell any shares of Nuance common stock for a period of six months from the closing of the transaction, expected in early February 2009.

''Warburg Pincus has enjoyed a long and rewarding relationship with Nuance and we're pleased with the opportunity to invest further in support of the company,'' said Pat Hackett, managing director, Warburg Pincus. ''Nuance has a track record of leadership and presents a high-quality investment opportunity in speech technologies and applications, markets that are demonstrating long-term growth.''

Separately, Nuance today announced with IBM that the two companies have entered into a licensing and technical services agreement to enhance and expand innovative speech solutions designed to better serve enterprises, consumers, carriers, and partners worldwide.

Nuance expects the first integrated speech innovations combining Nuance and IBM technologies to be available within two years. IBM will continue to serve its own customers. In a second component of the agreement, Nuance will purchase speech-related patents from IBM.