Subject to customary conditions and regulatory approvals and expected to be completed by the end of July 2021, the acquisition will see GlobalLogic contribute to the strategy of Hitachi’s data insights platform, Lumada, together with Hitachi Vantara.
With Hitachi Vantara already playing a key role in driving Lumada business growth in the global digital product engineering market, which is growing at a CAGR of 19% and projected to reach $1.1 trillion by 2025, GlobalLogic will look to contribute increased scope and breadth of client digital engagements.
The acquisition will create synergies across Hitachi’s five sectors – IT, Energy, Industry, Mobility and Smart Life – and its automotive systems business, Hitachi Astemo, by accelerating advanced digital transformation of social infrastructure such as rail, energy, and healthcare at a global scale.
As part of its 2021 Mid-term Management Plan, Hitachi previously committed to the strategy to make growth investments of 1 trillion yen in the IT sector, aiming to to strengthen digital capabilities, including products, solutions, partnerships, front and delivery capabilities.
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“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,” said Toshiaki Higashihara, president and CEO of Hitachi.
“The synergy of GlobalLogic’s leading experience design and innovation with Hitachi’s expertise in IT, operational technology, and products, will help us realise 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 realise sustainable society.”
Shashank Samant, president and CEO of GlobalLogic, commented: “Companies in every industry are transforming with digital technology – to better engage customers, create new revenue streams and drive a higher quality of life.
“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.”
With over 20,000 professionals in 14 countries, GlobalLogic operates design studios and software product engineering centres around the world, and uses “chip-to-cloud” product engineering to help clients drive new revenue streams and incremental value for their customers.
Combining its technology with experience design skills and vertical industry expertise, the company has a client base of over 400 clients, comprised of brands spanning industries such as communications, financial services, healthcare & life sciences, and manufacturing.
GlobalLogic’s revenues are expected to reach approximately $1.2 billion, with adjusted EBITDA margins to be over 20% in fiscal 2021, with the aim to achieve adjusted EBITDA of over $1 billion by fiscal year 2028.