Hitachi set to acquire U.S. software developer GlobalLogic

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The $9.6 Billion deal is part of the Japanese tech giant’s campaign to transform its product palette.

This week Hitachi announced it will buy U.S. software company GlobalLogic Inc for $9.6 billion. The move marks the Japanese industrial conglomerate’s aim to expand from electronics hardware to digital services, according to a report in Reuters.

Silicon Valley-based GlobalLogic, founded in 2000, develops platforms for companies pursuing digital business opportunities. The company serves 400 U.S. companies, including telecommunication group Sprint, as well as international players such as automaker Volvo. Hitachi is hoping the acquisition will help it expand sales of its own systems to these companies. It has more than 20,000 employees in 14 countries, along with a development base in India.

Part of a “portfolio overhaul”

The acquisition is part of Hitachi’s ongoing business portfolio overhaul, which includes the $7 billion acquisition of ABB’s power grid business last year and a series of divestitures of its domestic hardware subsidiaries.

Nikkei Asia reported that the deal is expected to be the largest acquisition by a Japanese electrical equipment company.

The news sent Hitachi’s stock down more than 7% at one point on the Tokyo Stock Exchange.

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 400 active clients in various industries including automotive, healthcare, technology, according to its websites.

Hitachi is aiming to close the transaction by the end of July.