We heard this week that Nuance Communications Inc. (NASDAQ:NUAN) is reportedly exploring a possible sale of itself. Of course this isn’t a new rumor, as speculations about a buyout have been circulating at least since activist investor Carl Icahn accumulated his large 19% stake in the Siri maker. So is this time different than all the other times? It seems analysts may be starting to get convinced that a deal is near.

Nuance Communication Logo

Nuance sold to Samsung?

In a report dated June 16, 2014, Deutsche Bank analysts Nandan Amladi and Sameer Kalucha focused on the possibility that Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is the main suitor. Of course Samsung and Apple Inc. (NASDAQ:AAPL) are Nuance Communications Inc. (NASDAQ:NUAN)’s two biggest mobile segment customers.

If Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) does indeed become the company’s buyer, they note that it would deprive Apple Inc. (NASDAQ:AAPL) of the technology behind Siri. However, they say this might not be a big deal because Apple did buy speech technology vendor Novauris Technologies. If Samsung really is the buyer, they also question what the company will do with Nuance Communications Inc. (NASDAQ:NUAN)’s other segments.

Samsung takes on Google

The Deutsche Bank analysts said Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is probably Nuance Communications Inc. (NASDAQ:NUAN)’s largest customer. They think it would make sense for Samsung to buy Nuance not just for that reason, but also because it looks like the company could be trying to create an open source mobile operating system that rivals Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG)’s Android.

Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) recently announced new handsets that run on its Tizen operating system, although it continues to manufacture smartphones that run on Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG)’s Android OS. One of the reasons Nuance Communications Inc. (NASDAQ:NUAN) was able to sell to so many competing companies was because of its neutrality, but that will change if Samsung buys it, thus disrupting the mobile ecosystem.

What might Nuance be worth?

So if Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) really does want to buy Nuance Communications Inc. (NASDAQ:NUAN), what could it be worth? The Deutsche Bank team found that the majority of acquisitions in the software segment over the last ten years have been in the 4 to 8 times multiple range.

They note that most of Nuance Communications Inc. (NASDAQ:NUAN)’s revenue is recurring. When applying their estimated multiple range to their 2015 fiscal year estimates, they see a price tag of between $14 and $32 per share for Nuance. They expect the end deal to be toward the high end of that because of the nature of its recurring revenue model.

The Deutsche Bank team reiterated their Buy rating and $22 per share price target for Nuance Communications Inc. (NASDAQ:NUAN).