Hitachi to buy U.S. software developer GlobalLogic for $9.6 billion
By Makiko Yamazaki and Sam Nussey
TOKYO (Reuters) -Hitachi Ltd said on Wednesday it will buy U.S. 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 U.S. 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.
(Reporting by Makiko Yamazaki; Editing by Kim Coghill)