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What kind of company is GlobalLogic?Why did Hitachi buy it for 1 trillion yen?
GlobalLogic, a US digital service company that has suddenly attracted attention, announced that Hitachi will spend a total of 9.5 billion dollars (about 1 trillion yen) to acquire it. The company is a global IT company with 20,000 employees, and has strengths in high value-added solutions such as promotion of digital transformation (DX) and software research and development. Why did Hitachi acquire GlobalLogic, and what kind of company is GlobalLogic in the first place? I would like to unravel along with the history of GlobalLogic, which has grown enormous as a result of continued acquisitions.
Takayuki Sato, Consultant in Spain
Takayuki Sato, Consultant in Spain
General Manager of Product Development Department at Mint Labs. Born in Tochigi prefecture in 1981. Completed the Graduate School of Engineering, the University of Tokyo in 2006. After working as an IT consultant and software developer at IBM Japan, he earned an MBA (Master of Business Administration) from ESADE Business School. Currently, he is engaged in business management and product development of a medical venture company in Barcelona, Spain, and also conducts consulting activities related to issues that span IT, management, and social contribution. His Twitter account is @ takayukisato624. He runs a blog "CTO for good" about business models and working styles abroad.
Developing high value-added systems on a global scale
Why GlobalLogic was able to make a leap
Why did Hitachi acquire GlobalLogic?
The aim is that market that expands to 11.5 trillion yen
Developing high value-added systems on a global scale
GlobalLogic is a global software design and development company headquartered in Silicon Valley. Founded in 2000, it employs 20,000 people. The development center covers a wide range of regions including North America (US / Canada), Europe (Germany / Croatia / Sweden / Israel / Poland / Slovakia / Ukraine), Asia (India) and South America (Argentina). The business model is outsourced to client companies to design software and carry out research and development. It has grown into a major company with more than 400 client companies. Sales in 2021 are said to reach $ 1.2 billion. We also have industry-specific solutions, with customers in a variety of industries including automotive, finance, telecommunications, retail, healthcare, manufacturing, and media. After its founding, it promoted inexpensive offshore development by acquiring software development companies in India and Ukraine. However, in recent years, it has begun to provide high value-added services that go beyond mere outsourcing. Specifically, it includes user experience design, data analysis, cloud implementation, prototype development, content development, and so on. He has also started consulting for digital transformation (DX), which reforms operations from a digital perspective.
Why GlobalLogic was able to make a leap
Many acquisitions are one of the reasons why GlobalLogic has grown into an international company. Especially in the 2000s, it acquired companies involved in offshore development, such as Lambent (India) in 2006, Varidio (Ukraine) in 2008, Cubika (Argentina) in 2008, and 3CIS (China) in 2008. On the other hand, since 2010, GlobalLogic has shifted its focus to high value-added, industry-specific strategies. 2011 Rofous (product and content development), 2011 Method (user experience), 2016 REC Global (embedded software), 2019 Skookum (digital strategy), 2020 Meelogic (industry-specific IT consulting), 2020 ECS Group Examples such as (DX consulting) stand out. In addition, the method of raising funds has changed with the times. In 2006 and 2008, it received more than $ 29 million in funding from major US venture capital firms Sequoia Capital and New Enterprise Associates. It was subsequently acquired by private equity and became part of Apax in 2013 and Partners Group in 2018. When Partners Group acquired GlobalLogic in 2018, it reportedly had sales of $ 500 million and an acquisition price of $ 2 billion. At the time of the acquisition by Hitachi in 2021, sales were $ 1.2 billion and the purchase price was $ 9.6 billion. It can be seen that the corporate value has increased significantly in just three years (unless Hitachi has grabbed a high price). [Next page] Why did Hitachi acquire GlobalLogic?
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