TOKYO, March 04/02/2021— Japanese leading tech firm, Hitachi, Ltd. (TSE: 6501, “Hitachi”) acquire GlobalLogic, a leading U.S.-headquartered digital engineering services company for $9.6 billion.
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.”
Lumada is the name of Hitachi’s advanced digital solutions and services for turning data into insights that drive digital transformation of social infrastructure.
The acquisition will accelerate the advanced digital transformation of social infrastructures such as rail, energy, and healthcare on a global scale.
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.
Digital transformation (DX) investment is growing at an accelerated pace globally. IDC predicts that 65% of global GDP will be digitalized by 2022.
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%.
Digital transformation continues to be a priority for organizations everywhere, and the COVID-19 pandemic has only expanded demand for new data-driven business models, customer experiences, and connected ecosystems.
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 with a high profitability profile and strong revenue CAGR, GlobalLogic will aim to achieve adjusted EBITDA of over 1 billion U.S. dollars by fiscal 2028.