Hitachi Systems to Enter Indian IT Market Through Acquisition of Leading Indian IT Services Company

hitachiAcquisition to Obtain Business Platform in India and Build Value Chain, Leveraging Synergies between Both Companies

 

Tokyo, Japan and New Delhi, India – February 26, 2014

 

Hitachi Systems, Ltd. (“Hitachi Systems”), a wholly owned subsidiary of Hitachi, Ltd. (TSE: 6501) and Micro Clinic India Pvt. Ltd. (“Micro Clinic”), an IT services company based in the Republic of India (“India”), today announced that they have concluded a share purchase agreement and shareholders’ agreement to bolster the IT services business in India.

Specifically, Hitachi Systems will acquire approximately 76% of Micro Clinic shares and rename the company as Hitachi Systems Micro Clinic Pvt. Ltd. Looking ahead, Hitachi Systems and Micro Clinic will implement procedures aimed at completing the share transfer by the end of March 2014.

In India, demand for IT services is growing rapidly. This reflects both the accelerating pace by which Japanese

and other overseas companies are entering the Indian market, and also the expansion of Indian companies’ IT investment accompanying the business growth.

Hitachi sees India as an important region in its global strategy and is stepping up development of the Hitachi Group’s Social Innovation Business in the country. Hitachi aims to grow revenues in India by nearly 3 times to 300 billion yen by the fiscal year ending March 31, 2016, compared with the fiscal year ended March 31, 2012. In this context, Hitachi Systems, a core company of Hitachi’s Information & Telecommunication Systems Business, has been exploring ways to obtain an IT services business platform and expand business in India, where rapid economic growth is under way.

Meanwhile, Micro Clinic is one of India’s leading IT services companies. With 15 business sites in major cities across India, and approximately 150 satellite offices, Micro Clinic provides a broad range of IT services centered on the supply of IT platforms and maintenance services. Furthermore, Micro Clinic is working to strengthen virtualization services, managed services and other services, with the aim of driving further business expansion.

Against this backdrop, Hitachi Systems and Micro Clinic have agreed that Hitachi Systems shall convert Micro Clinic into a Group company.

Mr. Naoya Takahashi, President and CEO of Hitachi Systems, Ltd. said “I am extremely pleased to welcome Micro Clinic into the Hitachi Systems Group. We will expand innovative IT services to all of India-services that will fuse Micro Clinic’s business sites, and its abundant personnel, technologies and know-how, with Hitachi Systems’ virtualization and cloud services; managed services such as data center monitoring and operations; and security services. In doing so, we seek to contribute to the development of India’s economy, which continues to show remarkable growth.

I am delighted that by this strategic acquisition, we have advanced the original vision of the company and redefined the IT Services landscape. Micro Clinic will be obtaining an expansive range of opportunities to provide outstanding services in India as well as the rest of the world” said Mr. Tarun Seth, Managing Director of Micro Clinic India Pvt. Ltd. He further added, “By combining Hitachi Systems’ advanced technological capabilities with Micro Clinic’s human resources and robust customer and heterogeneous product partner platforms, we hope to create new value and supply unique services that will support customers’ business innovation needs.

Hitachi Systems and Micro Clinic will provide Indian enterprises, Japanese companies and other foreign-affiliated companies in India with one-stop services extending from procurement of IT equipment to systems design and, integration, operation and maintenance. This will be done by combining both companies products and services, technologies and know-how, and business resources. In addition, the two companies will work closely with the Hitachi Group companies in India in a push to expand the IT services business in the country.

The Hitachi Systems Group is targeting consolidated revenues of 500 billion yen and an overseas sales ratio of 10% in fiscal 2015 under its medium-term management plan, and pursuing various measures to this end. This acquisition will strengthen and expand Hitachi Systems’ global operations, and is one element aimed at reaching these targets.

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About Micro Clinic India Pvt. Ltd. (As of February 26, 2014)

 

Company name Micro Clinic India Private Limited
Established November 22, 1993
Headquarters E-44/2, Okhla Industrial Area, Phase – II,

New Delhi -110 020, India

URL www.microclinic.com
Representative Tarun Seth, Managing Director
Capital 12.5 million rupees

(20 million yen, at 1.6 yen = 1 rupee)

Net sales 769 million rupees

(1,230 million yen, at 1.6 yen = 1 rupee)

(for the fiscal year ended March 31, 2013)

Group company Micro Clinic Software India Private Limited
Number of Employees

650 (incl. Group company)

Business Hardware sales and maintenance, systems integration, network integration, security services, virtualization services, managed services, desktop services

 

About Hitachi Systems

 

Company name Hitachi Systems, Ltd.
Established October 1, 1962
Headquarters 1-2-1 Osaki, Shinagawa-ku, Tokyo 141-8672
URL www.hitachi-systems.com
Representative Naoya Takahashi, President and Chief Executive Officer
Capital 19,162 million yen (As of March 31, 2013)
Net sales 339,956 million yen (for the fiscal year ended March 31, 2013)
Number of Employees 10,851 (As of March 31, 2013)
Business Systems integration business, systems operation, monitoring and maintenance business, network services business and sale and development of information-related equipment and software

 

About Hitachi, Ltd.

Company name Hitachi, Ltd.
Established February 1, 1920
Headquarters 6-6, Marunouchi 1-chome, Chiyoda-ku, Tokyo
URL www.hitachi.com
Representative Hiroaki Nakanishi, President
Capital 458,790 million yen ( As of March 31, 2013)
Consolidated Net sales 9,041,071 million yen (for the fiscal year ended March 31, 2013)
Consolidated

Number of Employees

326,240 (As of March 31, 2013)
Business Development, manufacture and sales of products and

provision of service across 10 segments:

Information & Telecommunication Systems, Power

Systems, Social Infrastructure & Industrial Systems,

Electronic Systems & Equipment, Construction Machinery,

High Functional Materials & Components, Automotive

Systems, Digital Media & Consumer Products, Others

(Logistics and Other services) and Financial Services

 

About Hitachi in India

 

Hitachi started its business in India in the 1930’s. Currently, Hitachi has approximately 30 business bases and approximately 7,500 employees in India. In addition to being a leader in construction machinery and air-conditioning systems, the Hitachi Group in India is expanding on its ‘Social Innovation Business’, such as information & telecommunication systems, power systems, industrial, transportation and urban development systems. Together with further localization, Hitachi aims to contribute to a sustainable society in India as well as the country’s economic growth. For more information about the Hitachi Group in India, please visit the website at http://www.hitachi.co.in/