The Board of Nuance Communications, Inc. (NASDAQ: NUAN) announced the spin-off of automotive business segment on November 19, 2018. Pursuant to the spin-off, Nuance Communications will distribute shares of spun-off entity's (Nuance Auto) common stock as a tax-free dividend to holders of common stock of Nuance Communications as of a record date to be determined by the Board of Directors of Nuance Communications. Immediately following the transaction, the shareholders of Nuance Communications will own shares of both spun-off entity (Nuance Auto) and Nuance Communications. Upon completion, Nuance Auto will become an independent, publicly traded company. The name of the spun-off entity will be Cerence Inc., which will become official on closing of the transaction. As of September 30, 2019, Cerence priced senior secured facilities, consisting of a five-year senior secured term loan facility in an aggregate principal amount of $270 million on the financing closing date and a 54-month senior secured first-lien revolving credit facility in an aggregate principal amount of $75 million. Up to the equivalent of $15 million may be utilized under the revolving facility for the issuance of letters of credit to the borrower or any of its subsidiaries. Letters of credit will be available for issuance under the credit agreement that will govern the Senior Credit Facilities on terms and conditions customary for financings of this kind, which issuances will reduce availability under the revolving facility. The Term Loan Facility was reduced from the previously contemplated amount of $425 million. The letters of credit and Revolving Facility will be available for limited purposes on the effective date of the Senior Credit Facilities and for working capital and other general corporate purposes from time to time after the Financing Closing Date prior to the final maturity of the Revolving Facility. In connection with the consummation of the deal, the Borrower expects to transfer approximately $160 million of the net proceeds of the Term Loan Facility to Nuance, subject to adjustment due to final transaction expenses and cash on the Cerence balance sheet prior to receiving proceeds from the Term Loan Facility. It is expected that Cerence will have approximately $110 million of cash on its balance sheet upon the closing of the Spin-Off.

In the year ended September 30, 2018, the automotive business segment generated $277 million in revenues, gross profit $194 million, net income $6 million and EBITDA $106 million. Nuance Communications intends to appoint an independent management team and nominate members to a separate Board of Directors for Nuance Auto before the transaction is completed. As per disclosure of June 7, 2019, Nuance Communications announced that it has selected Sanjay Dhawan to lead its automotive business segment and become Chief Executive Office and a member of the Board of Directors upon completion of the spin-off. Arun Sarin will be appointed Cerence Chairman of the Board and board member includes Thomas Beaudoin, Marianne Budnik, Sanjay Jha, Kristi Ann Matus and Alfred Nietzel. Nuance Auto is expected to be headquartered in Boston. The spin-off is subject to final approval of the Board of Directors of Nuance Communications, the effectiveness of a Registration Statement on Form 10 and, the approved listing of Nuance Auto's common stock on a national securities exchange selected by Nuance Communications. The spin-off will not require a vote of shareholders of Nuance Communications. The transaction is expected to be completed before the end of fiscal 2019. As of August 5, 2019, the spin-off is expected to be completed in October 1, 2019. As of September 4, 2019, each shareholder of Nuance Communications, Inc. will receive one share of Cerence Inc. common stock for every 8 shares of common stock of Nuance Communications, Inc. held on the record date of September 17, 2019. Cerence Inc. will trade on Nasdaq under the symbol “CRNC.” The EX distribution when-issued market of Nuance Communications and the when-issued market for Cerence Inc. Common Stock (CRNCV) will begin trading on Nasdaq on Monday, September 16, 2019. It has been advised by Nasdaq that shares of Cerence common stock begin trading today on September 16, 2019 through a “when-issued” basis on the Nasdaq Global Select Market under the symbol “CRNCV” and will continue through October 1, 2019. Sales and purchases of Cerence common stock on a “when-issued” basis are made conditionally on the distribution of the shares, and the sales and purchases generally settle within three trading days after the distribution date (October 1, 2019). Goldman Sachs & Co. LLC and Naveen Nataraj, Fausto Borotto, Brian Ierubino, Andrew Longley, Gautam Kaul and Johnny Ringo of Evercore Inc. (NYSE:EVR) acted as financial advisors while Scott Barshay, Steven Williams, Michael Vogel, John Kennedy and Gregory Ezring, Caith Kushner, Frances Mi, Patricia Vaz de Almeida, Jeffrey Samuels, Patrick Karsnitz, Alyssa Wolpin, Jonathan Ashtor, Lawrence Witdorchic, Jason Ertel, Peter Fisch and Hallie Goldblatt of Paul, Weiss, Rifkind, Wharton & Garrison LLP and Baker & McKenzie LLP acted as legal advisors to Nuance Communications, Inc.

Nuance Communications, Inc. completed the Spin-Off of Cerence Inc. (NasdaqGS:CRNC) on October 1, 2019. In connection with the spin-off, Nuance completed the previously announced redemption of all of the $300 million aggregate principal amount of its outstanding 6% Senior Notes on October 1, 2019.