The prospects for more convenient entry of text messages around the world became more real as Nuance Communications and Canada’s Zi Technologies finally agreed to terms whereby Nuance will acquire Zi for a combination of $17 million in cash and another $18 million worth of Nuance common stock. The price represents a 73% premium over Zi’s Friday closing share price on the Toronto Stock Exchange. However it is $5 million less than Nuance had offered for the company roughly a month ago.

The deal is the result of protracted discussions, during which Nuance threatened to sue Zi for patent infringement and Zi’s board of directors continued to hold out against Nuance’s acquisition offers. Indeed, Zi aggressively pursued licensing agreements with carriers, device makers and content providers to incorporate its predictive text input and other technologies into solutions that support mobile search, messaging and advertising delivery.

Like Nuance, the company has impressive topline results and gross profits, but has yet to see its revenues deliver profits to bottom line (Net Income). To Nuance, Zi brings predictive text entry to multiple languages, including Arabic, Chinese and Japanese as part of a roster of 60 languages overall. That will bring the total number of languages and dialects supported by Nuance-enabled advanced text-based user input solutions to 80.

Most important will be the incorporation of speedy, more convenient ways to enter text both as commands and content over mobile phones among high-growth wireless markets in the Asia/Pacific markets and in the Middle East.

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