Hitachi completes Acquisition of GlobalLogic 

Deal Overview 

Acquirer: Hitachi 

Target: GlobalLogic 

Value: US$9.6 billion 

Announced date: August 3rd, 2020 

Closed date: March 31st , 2021 

Financial Advisors: Credit Suisse for Hitachi, J.P. Morgan & Goldman Sachs for GlobalLogic 

Legal Counsel: Shearman & Sterling for Hitachi, Kirkland & Ellis for GlobalLogic 

Company Details  

Hitachi is a global conglomerate offering products and services across a variety of industries, including IT, energy, industry and mobility. 

CEO: Toshiaki Higashihara 

Number of Employees: N/A 

Market cap: 56.91 billion JPY 

Enterprise Value: 2.01 trillion JPY 

LTM Revenue: 8.73 billion JPY 

LTM EBITDA: 1.36 billion JPY 

GlobalLogic is a global digital product engineering company, with the aim of “showing businesses how they can better engage their consumers, innovating within predictable budgets, and bringing the next generation of digital products and services to market in the shortest possible time” 

CEO: Shashank Samant 

Number of Employees: 20,000 

Market cap: N/A 

Enterprise Value: N/A 

LTM Revenue: N/A 

LTM EBITDA: N/A 

Rationale 

The main reason behind this acquisition from Hitachi’s side is to bolster the portfolio of “Lumada”, its digital solutions business which specialises in “social infrastructure” – including rail, energy and healthcare. Lumada sees itself as an engine of value creation for its customers and partners focused on insights derived from data. Morever, with GlobalLogic having expertise in software product engineering, adding this to Hitathi’s portfolio will provide a reliable method in its aim to expand Lumada. This acquisition also follows a growing recent trend of smaller software companies being acquired, alluding to the importance of software to the big players, particularly in boosting productivity. 

Risk and uncertainties 

With both companies boasting healthy financials pre-acquisition, there appears to be little financial risk for either party in completing this deal, thus on the most part, this promises to propel Hitachi’s profitability. One factor that could limit the growth of this company, however, is the remaining uncertainty of everyday life with COVID-19. Restrictions on transport and the supply and manufacturing side could of course have negative impacts on the financials post-acquisition. 

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