Hitachi will acquire GlobalLogic Inc. The acquisition is based on the definitive agreement among Hitachi Global Digital Holdings Corporation (“HGDH”), a U.S. subsidiary, an SPC established by HGDH for the acquisition and GlobalLogic Worldwide Holdings, Inc., the parent company of GlobalLogic. The transaction is subject to customary conditions and regulatory approvals and expected to be completed by the end of July 2021.
Through the acquisition, Hitachi expects the addition of GlobalLogic’s advanced digital engineering capabilities, and its solid client base including major technology companies, to strengthen the digital portfolio of “Lumada.” Hitachi Vantara LLC, a U.S.-based subsidiary of Hitachi and its digital infrastructure, data management, and digital solutions business, plays a key role in driving Lumada business growth in the global market.
The acquisition will create synergies across Hitachi’s five sectors – IT, Energy, Industry, Mobility and Smart Life – and automotive systems business (Hitachi Astemo) by accelerating the advanced digital transformation of social infrastructure such as rail, energy, and healthcare at a global scale. Through its Social Innovation Business delivered by collaborative creation with customers, Hitachi aims to increase social, environmental, and economic value for its customers and realize a sustainable society.
Headquartered in Silicon Valley, GlobalLogic is a leading company in the fast-growing digital engineering services market. With over 20,000 professionals in 14 countries, GlobalLogic operates design studios and software product engineering centers around the world.
GlobalLogic has deep “chip-to-cloud” advanced software product engineering technology as well as experience design skills and vertical industry expertise. By combining these capabilities, GlobalLogic helps clients drive new revenue streams and incremental value for their customers by designing and developing innovative software that powers products, platforms, and digital experiences.
The company has a solid client base with over 400 clients comprised of market leaders and marquee brands spanning key industries such as communications, financial services, automotive, healthcare & life sciences, technology, media and entertainment, and manufacturing.
In addition, according to Zinnov (a research & advisory company specializing in Product Engineering and Digital Transformation) the total addressable market for digital engineering will grow to 1.1 trillion U.S. dollars by 2025, growing at a compound annual growth rate (CAGR) of 19%.
Toshiaki Higashihara, President & CEO of Hitachi, said “The acquisition of GlobalLogic creates an exciting new opportunity for Hitachi to expand our offerings of Lumada solutions and services, provide value to customers in their digital transformation journey, and grow our Lumada business globally. The synergy of GlobalLogic’s leading experience design and innovation with Hitachi’s expertise in IT, operational technology, and products, will help us realize our goal to be the leading digital transformation innovator in social infrastructure worldwide. Together, we will create new social, environmental and economic value for our globally expanding client companies and elevate QoL (quality of life) for people through contributions to realize sustainable society.”
“Companies in every industry are transforming with digital technology – to better engage customers, create new revenue streams and drive a higher quality of life.” said Shashank Samant, President and CEO, GlobalLogic. “We have a tremendous opportunity ahead and we are excited to embark on this journey with Hitachi, combining our collective skills, technologies, and market presence to deliver greater value to our clients as they transform their businesses.”
GlobalLogic’s revenues are expected to reach approx. 1.2 billion U.S. dollars (approx. 129.6 billion yen*5) with adjusted EBITDA*6 margins to be over 20% in fiscal 2021. With a high profitability profile and strong revenue CAGR, GlobalLogic will aim to achieve adjusted EBITDA of over 1 billion U.S. dollars (approx. 108.0 billion yen) by fiscal 2028.
HGDH and GlobalLogic Worldwide Holdings have agreed on an equity value of 8.5 billion U.S. dollars (approx. 918.0 billion yen) with an enterprise value of 9.5 billion U.S. dollars (approx. 1,026.0 billion yen). This represents about 37.4x in CY2021 and 29.4x in CY2022 of expected adjusted EBITDA respectively and are within the calculation range of Hitachi’s comparable company ana
