Partners Group, CPPIB exit GlobalLogic to Hitachi

The total acquisition cost, including debt, is expected to be $9.6 billion, representing 37.4x GlobalLogic’s expected EBITDA for 2021. The transaction is scheduled to close in July.

Partners Group invested $1 billion for a 48% interest in the company in 2018, while CPPIB paid $720 million for 48% the prior year. The seller in both transactions was Apax Partners, which acquired the business for $420 million in a 2013 transaction, providing exits for several private equity investors. Partners Group and CPPIB each currently hold approximately 45%.

GlobalLogic was founded in 2000 by several Indian entrepreneurs and retains a sizeable presence in India. It helps companies digitize their operations through software platform and cloud technology delivery, and digital engineering consulting services.

Operations encompass 20,000 staff, 30 engineering centers, and eight design studies across 14 countries. This compares to 12,000 staff and 26 engineering centers across nine countries at the time of the Partners Group investment.

Partners Group supported a number of value-add initiatives during its holding period. These included an expansion of the client base to about 400 corporations and the introduction of a more targeted marketing strategy that now features a PE-focused sales channel. GlobalLogic has also completed four strategic acquisitions in the past three years, primarily in Europe, and established a dedicated environmental, social, and governance function.

Revenue increased from $646.6 million in 2019 to $771.1 million in 2020, with the company citing its various operational expansions as well as corporate digitization tailwinds related to COVID-19. Adjusted EBITDA increased from $145.6 million in 2019 to $179.5 million in 2020.

"We have built a strong foundation for GlobalLogic to enter its next phase of growth and believe it is the ideal time to exit the business on behalf of our clients,” Todd Miller, a senior member of management for private equity at Partners Group, said in a statement. “We are confident that Hitachi is the right institutional partner for all stakeholders to advance the company given its focus on social innovation, modernizing infrastructure and digital transformation.”

Hitachi plans to integrate GlobalLogic into its Lumada innovation program, which it launched in 2016 to modernize its own operations, especially in digital transformation of social infrastructure. Lumada reflects the Japanese conglomerate’s pivot to a more concentrated suite of technology domains, including mobility, smart life, industrial, energy, and IT. It operates in close partnership with a data-focused subsidiary in the US, Vantara, and a Japan-US cross-border VC fund set up in 2018.

Japan’s longstanding large-cap corporations, especially those in the traditional electronics manufacturing space, are pivoting their business models toward more digital and advanced technologies. The development has largely been seen as a driver of M&A through non-core divestments but also a new source of funding and exits.

Since launching Lumada, Hitachi has made acquisitions in power grid technology, rail equipment, and smart manufacturing.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• North America
• Exits
• Trade sale
• Technology
• USA
• Japan
• Partners Group
• CPPIB
• enterprise software