Speech recognition software provider Nuance will acquire Canadian text input technology specialist Zi for $35 million, ending a 7-month bid that grew increasingly bitter between the two companies. Burlington, Mass-based Nuance said it will pay Zi shareholders $17 million in cash and $18 million in Nuance common stock, which equates to $0.69 per share, split between $0.34 in cash and approximately .04 shares of Nuance stock. The purchase price represents a 73 percent premium over the smaller company’s share price over the closing price of its shares the day before the acquisition was announced.

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Nuance said that it is purchasing Zi for its mobile search and text input technologies, which will help round out its own similar products. In August last year, Nuance offered to buy Zi for $40 million, which was promptly rejected by the messaging technology company as too low an offer. Nuance then sued Zi for patent infringement over SMS technology the Canadian company had licensed from Tegic Communications, another Nuance acquisition. Not to be deterred, Nuance came back with an even lower offer in November, citing the economic downturn, offering $20 million, again rejected.