Hitachi Systems Buys IT Services Company Micro Clinic

By Yogesh Gupta Feb 26th 2014

The acquisition marks the Japanese technology giant's business expansion in India. Micro Clinic will be renamed as Hitachi Systems Micro Clinic.

The two-decade old enteprise solution provider Micro Clinic has caught the fancy of a Japanese technology giant.

Hitachi Systems, a wholly owned subsidiary of Hitachi, and Micro Clinic India, an IT services company of India have concluded a share purchase agreement and shareholders’ agreement to bolster the IT services business in India. The size of the acquisiton deal has not been disclosed.

Hitachi Systems will acquire approximately 76 percent of Micro Clinic shares and rename the company as Hitachi Systems Micro Clinic. Hitachi Systems and Micro Clinic will implement procedures aimed at completing the share transfer by the end of March 2014.

Delhi headquartered Micro Clinic, founded in 1991 by Tarun Seth, has recorded net sales of Rs 769 million for the fiscal year ended March 31, 2013.

Hitachi sees India as an important region in its global strategy and to further accelerate the development of 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. 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.

Also Read: Micro Clinic Takes Confident Strides

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 through 650 employees (incl. group company). Micro Clinic is working to strengthen virtualization services, managed services and other services, with the aim of driving further business expansion.

Dr. Naoya Takahashi, President and CEO of Hitachi Systems said, "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.”

“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 Tarun Seth, Managing Director, Micro Clinic India.

We seek to contribute to the development of India’s economy, which continues to show remarkable growth, said Dr.Takahashi.

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.

The Hitachi Systems Group is targeting consolidated revenues of 500 billion yen and an overseas sales ratio of 10 percent in fiscal 2015 under its medium-term management plan. This acquisition will strengthen and expand Hitachi Systems’ global operations to reach these targets.

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, commented Seth.

This is a major development in recent times of an tier-2 Indian SI company acquired by an overseas MNC. Three years ago, Ricoh acquired Gurgaon based Momentum InfoCare. Coincidentally, both the deals involved partner companies headquartered in North India. And the acquirer in both cases were Japanese conglomerates - though different companies.

Will the Micro Clinic buy-out escalate investments of MNCs in competent partner companies based in India?

 

Yogesh Gupta is associate editor of ChannelWorld India. You can contact him at yogesh_gupta@idgindia.com

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