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

 WatchGuard_UTM Micro_clinic_ Hitachi_Inspire_the _NextHitachi 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 TakahashiPresident 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 SethManaging Director ofMicro 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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