Partners Group to sell US digital engineering services company GlobalLogic to Hitachi in deal valued at USD9.5bn
Partners Group, a global private markets firm, has agreed to sell its joint lead ownership stake in GlobalLogic, a specialist in digital engineering services, to Japanese conglomerate Hitachi LTD (Hitachi), on behalf of clients.
The transaction values GlobalLogic at an enterprise value of USD9.5 billion.
In 2018, Partners Group acquired a joint lead ownership equity stake in GlobalLogic alongside equity partner Canada Pension Plan Investment Board (CPP Investments) at an enterprise value of USD 2 billion. Partners Group and CPP Investments each hold an equity ownership interest of approximately 45 per cent in the business and will both be exiting as part of the transaction.
Founded in 2000 and headquartered in San Jose, California, GlobalLogic is a leader in design-led digital engineering services that develops next-generation software platforms for enterprises and technology disruptors worldwide. The Company has over 20,000 professionals and other personnel operating from 30 engineering centres and eight design studios spanning four continents. Aligned with Partners Group's focus on investments that have broad positive stakeholder impact, GlobalLogic has played an instrumental role in helping businesses navigate the digital transition, a key transformative trend that accelerated during the Covid-19 pandemic, helping create a more efficient and sustainable society. GlobalLogic's services accelerate clients' digital futures through a combination of best-in-class design expertise, engineering and data-driven insights.
Over the last three years, Partners Group used its entrepreneurial governance approach at GlobalLogic to support the implementation of several transformational value creation initiatives and drive the Company's strong growth. Key initiatives have included increasing the size of the Company's top accounts, many of which are global marquee brands, and introducing a more targeted sales strategy in certain customer segments, including the development of a private equity-focused sales channel. An increased client base and rising demand has led to GlobalLogic hiring more than 7,000 additional software designers, engineers, and data experts since Partners Group's initial investment. Under Partners Group and CPP Investments' ownership, GlobalLogic has also completed four strategic acquisitions, including three in Europe, further adding significant value to the business. Additionally, Partners Group enhanced the Company's focus on environmental, social and governance (ESG) initiatives, helping the Company establish a dedicated ESG function focused on refining and implementing its ESG strategy going forward.
Dr Marcel Erni, Co-Founder, Member of the Board of Directors, Partners Group, says: "GlobalLogic is serving clients on the front line of the digital transition, helping them reimagine their offering, adapt their business models and change how they engage with consumers. Digitization is one of the three investment giga themes that Partners Group is focused on that is driving change across industries worldwide. GlobalLogic is an exciting success story demonstrating how Partners Group delivers sustainable returns to our clients through transformational investing. It has been a pleasure to work in partnership with CPP Investments and GlobalLogic's management team to support the Company's rapid growth and cement its position as a market leader."
Shashank Samant, Chief Executive Officer, GlobalLogic, says: "During the course of our partnership with Partners Group and CPP Investments, GlobalLogic experienced strong growth in our core markets and has secured footholds in new geographies. The global platform and operational expertise of Partners Group and CPP Investments have been highly valued resources. The teams' experience building out fast-growing technology businesses and international footprint have been critical in developing and executing on our expansion plans. We are grateful to Partners Group and CPP Investments for their years of hard work and partnership and feel well-positioned to continue growing as part of the Hitachi family."
Todd J Miller, Senior Member of Management, Private Equity, Partners Group, adds: "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. We are confident that Hitachi is the right institutional partner for all stakeholders to advance the Company given its focus on social innovation, modernising infrastructure and digital transformation. GlobalLogic provided us with an opportunity to build value in a business benefiting from transformative market trends, but also to create positive stakeholder impact by helping businesses adapt to new ways of operating in today's economy, both supporting growth and securing jobs during COVID-19. We look forward to seeing the business and its employees continue on this upward trajectory going forward."
Kirkland & Ellis LLP served as legal advisor and Goldman Sachs & Co LLC and JP Morgan Securities LLC acted as financial advisors.