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
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
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.