FOR IMMEDIATE RELEASE

Hitachi to Acquire GlobalLogic, a Leading U.S.-based

Digital Engineering Services Company

Acquisition will Accelerate the Digital Transformation of Social Infrastructure on a Global Scale by Aligning GlobalLogic's Advanced Digital Engineering Services with

Hitachi's Lumada Portfolio

Tokyo, Japan, March 31, 2021 --- Hitachi, Ltd. (TSE: 6501, "Hitachi") today

announced that it will acquire GlobalLogic Inc. (President and CEO: Shashank Samant, "GlobalLogic"), a leading U.S.-headquartered digital engineering services company. The acquisition is based on the definitive agreement among Hitachi Global Digital Holdings Corporation ("HGDH"), a U.S. subsidiary, an SPC established by HGDH for the acquisition and GlobalLogic Worldwide Holdings, Inc., the parent company of GlobalLogic. The transaction is subject to customary conditions and regulatory approvals and expected to be completed by the end of July 2021.

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."*1 Hitachi Vantara LLC, a U.S.-based subsidiary of Hitachi and it's digital infrastructure, data management, and digital solutions business, plays a key role in driving Lumada business growth in the global market.

The acquisition will create synergies across Hitachi's five sectors - IT, Energy, Industry, Mobility and Smart Life - and automotive systems business (Hitachi Astemo) by accelerating the advanced digital transformation of social infrastructure such as rail, energy, and healthcare at a global scale. Through its Social Innovation Business delivered by collaborative creation with customers, Hitachi aims to increase social, environmental, and economic value for its customers and realize a sustainable society.

*1 Lumada is the name of Hitachi's advanced digital solutions and services for turning data into insights that drive digital transformation of social infrastructure.

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

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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 driven by products and services from digitally transformed enterprises. *2

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%.*3

*2 Source: IDC Press Release, October 29, 2020: IDC Reveals 2021 Worldwide Digital Transformation Predictions; 65% of Global GDP Digitalized by 2022, Driving Over $6.8 Trillion of Direct DX Investments from 2020 to 2023 https://www.idc.com/getdoc.jsp?containerId=prUS46967420

*3 Source: Zinnov Zones for Engineering & R&D Services Research (slide 3) https://zinnov.com/zinnov-zones-engineering-rd-services-2019/

These figures do not include the COVID-19 effect.

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. However, many organizations lack the knowledge and experience to design and deploy new digital platforms. They are also challenged by the shortage of the skills required to build digital-native products, and to design new interaction models and digital experiences, such as new digital ways of shopping or new models for delivering and receiving healthcare. Against this backdrop, the demand for GlobalLogic's services is growing rapidly, and the combined company has greater access to this massive market opportunity.

Hitachi has been promoting initiatives to transform and provide more advanced and intelligent social infrastructure, such as rail and energy, using its digital technology, in order to achieve a transformation into a global leader in the Social Innovation Business. As part its 2021 Mid-term Management Plan, Hitachi previously committed to the strategy to make growth investments of 1 trillion yen in the IT sector*4, primarily through Hitachi Vantara, to strengthen digital capabilities including digital products, solutions, partnerships, front and delivery capabilities. GlobalLogic will be an integral part and a growth engine of Hitachi's portfolio of Lumada digital solutions and services.

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*4 Hitachi, Ltd., IT Sector's presentation material at Hitachi IR Day 2019. https://www.hitachi.com/New/cnews/month/2019/06/190604/20190604_01_it_presentation_en.pdf

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 values 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 (approx.

129.6 billion yen*5) with adjusted EBITDA*6 margins to be over 20% in fiscal 2021. With a high profitability profile and strong revenue CAGR, GlobalLogic will aim to achieve adjusted EBITDA of over 1 billion U.S. dollars (approx. 108.0 billion yen) by fiscal 2028.

HGDH and GlobalLogic Worldwide Holdings have agreed on an equity value of 8.5 billion U.S. dollars (approx. 918.0 billion yen) with an enterprise value of 9.5 billion U.S. dollars (approx. 1,026.0 billion yen). This represents about 37.4x in CY2021 and 29.4x in CY2022 of expected adjusted EBITDA respectively and are within the calculation range of Hitachi's comparable company analysis and the discounted cash flow method. The total acquisition cost, including repayment of GlobalLogic's interest-bearing debt, is expected to be 9.6 billion U.S. dollars (approx. 1,036.8 billion yen).

*5 Converted at the rate of 108 yen to the U.S. dollar.

*6 EBITDA on a standalone basis, adjusted for stock-based compensation and non-recurringone-time costs.

Hitachi will acquire GlobalLogic Worldwide Holdings through a merger involving MergeCo H Global Inc. ("SPC"), a subsidiary established by HGDH for the purpose of the transaction. In this acquisition, the "reverse triangular merger method" will be

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adopted. Specifically, SPC will be merged with and into GlobalLogic Worldwide Holdings, which will be the surviving company. When the companies are merged, HGDH or SPC will provide cash to the shareholders of GlobalLogic Worldwide Holdings after which all the outstanding shares of GlobalLogic Worldwide Holdings will be cancelled. All the shares of SPC held by HGDH will be converted to common shares of GlobalLogic Worldwide Holdings, the surviving company. In this way, HGDH will acquire 100% of the outstanding shares of GlobalLogic Worldwide Holdings, the surviving company, and GlobalLogic Worldwide Holdings and GlobalLogic will become wholly owned subsidiaries of HGDH.

Closing of the transaction is anticipated by the end of July 2021 and is subject to customary conditions and regulatory approvals.

Credit Suisse Securities (USA) LLC acted as financial advisor to Hitachi in connection with the transaction and Shearman & Sterling LLP served as legal advisor. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC served as financial advisors and Kirkland & Ellis LLP served as legal advisor to GlobalLogic.

Subsidiary Profile: GlobalLogic Worldwide Holdings (Surviving Company)

Name

GlobalLogic Worldwide Holdings, Inc.

Head office

San Jose, California, United States

Title and name of

President and CEO: Shashank Samant

representative

Full-lifecycle product development services, user experience design,

Description of Business

product design, content

engineering, product research & ideation,

sustaining engineering, product engineering, product testing & quality

assurance, and product re-platforming

Establishment Date

September 22, 2000

Capital

1,557,448 thousand U.S. dollars

Canada Pension Plan Investment Board: c.45%

Major equity interests and

Partners Group Holding AG: c.45%

their interest ratios

Individuals (Executives of GlobalLogic Worldwide Holdings and

others): c.10%

Capital relationship

None

Relationship between

Personnel relationship

None

Hitachi and the company

Transaction relationship

None

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Financial Results of GlobalLogic Worldwide Holdings in the Past Two Years*7 (Million U.S. dollars)

Fiscal year-end

March 2020

March 2019

Total assets

2,558.3

2,445.8

Revenue

771.1

646.6

Adjusted EBITDA*8

179.5

145.6

Adjusted operating income*8

63.4

31.1

*7 Financial result ended in March 2018 is not included considering the impact of the acquisition of GlobalLogic Holdings Limited by GlobalLogic Worldwide Holdings in August 2018.

*8 Adjusted for stock-based compensation and non-recurringone-time costs.

Company Profile: HGDH (Company to Acquire Shares)

Name

Hitachi Global Digital Holdings Corporation

Head office

Santa Clara, California, United States

Title and name of

Toshiaki Tokunaga

representative

CEO & Chairman of the Board

Business description

Holding company; conducts no operating activities and owns no

significant assets other than through its interests in its subsidiaries

Establishment date

April 1, 2008

Capital

1,442,641 thousand U.S. dollars

Major shareholders and

Hitachi, Ltd.: 100%

their shareholding ratios

Schedule

Date of resolution at the

March 31, 2021

Board of Directors meeting

Signing of the agreement

March 31, 2021

Closing date of

By the end of July 2021 (planned)

the transaction

Number of shares to be acquired, shareholdings before and after acquisition, and acquisition price

Number of shares

0

owned before change

Number of shares

100

to be acquired

Approx. 8.5 billion U.S. dollars (Approx. 918.0 billion yen)*9

Stock acquisition cost

Additionally, advisory fee and other expenses are expected to be approx. 50 million U.S.

dollars (estimated amount and approx. 5.4 billion yen)

Number of shares

100

owned after change

Ratio of voting

100%

rights held

*9 Converted at the rate of 108 yen to the U.S. dollar.

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Hitachi Ltd. published this content on 31 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2021 06:33:03 UTC.