Hitachi to buy US software developer GlobalLogic for $9.6b as it pivots to digital services

Photo: REUTERS/Toru Hanai

Hitachi Ltd said on Wednesday that it will buy US software company GlobalLogic Inc for $9.6 billion, including repayment of debt, as the Japanese industrial conglomerate pivots from electronics hardware to digital services.

The deal is the biggest Japanese outbound acquisition of a US hi-tech company on record, according to Refinitiv data.

The acquisition is part of Hitachi‘s ongoing business portfolio overhaul, which includes the $7 billion acquisition of ABB Ltd’s power grid business last year and a series of divestitures of its domestic hardware subsidiaries.

Hitachi‘s stock tumbled 7% on the Tokyo Stock Exchange, its sharpest daily fall in more than a year, on the news.

San Jose-based GlobalLogic is currently owned 45% each by Canada Pension Plan Investment Board and Swiss investment firm Partners Group. The rest is owned by the company’s management.

Founded in 2000, GlobalLogic has more than 20,000 employees in 14 countries and offers software engineering services to 400 active clients in industries including automotive, healthcare, and finance.

GlobalLogic’s expertise stretches from chips to cloud services and will extend the range of Hitachi‘s own digital services business, company executives told a news conference.

Past GlobalLogic projects include working with McDonald’s on its customer app and in-store digital ordering system and with chipmaker Qualcomm on a fingerprint recognition system, according to its website.

Hitachi aims to close the transaction, which will be funded with cash and bank loans, by the end of July.

The conglomerate is in talks with private equity firms to sell Hitachi Metals Ltd, a deal that could fetch more than $6.4 billion, following the sale of its chemical unit and diagnostic imaging business.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.