Do you remember Hitachi? It’s a software company now

“It’s going to be a kind of reform for the whole company,” said Hitachi general manager Toshiaki Higashihara.

Hitachi paid a high price: more than four times the value assigned to GlobalLogic just three years ago. GlobalLogic had estimated revenue of $921 million for the year ending Wednesday, Hitachi said.

The US company will join Hitachi’s existing software and services business, called Lumada. About 70% of Lumada’s business currently comes from Japan.

“We have had achievements so far domestically in critical areas, but we have failed to spread our wings globally,” said Toshiaki Tokunaga, Head of Services and Platforms at Hitachi. He said Wednesday’s deal could eventually see the Lumada business get more than half of its revenue from outside Japan.

The deal gives GlobalLogic shares a value of $8.5 billion. Hitachi said its total cost would be $9.6 billion after including the GlobalLogic debt it is paying off.

The winners of the agreement are the Canada Pension Plan Investment Board and the investment company Partners Group.

Each owns nearly half of GlobalLogic, and each expects a net sale of $3.8 billion.

Hitachi, founded in 1910, has earned a reputation as one of the most aggressive dealmakers among Japanese conglomerates. It has long since retired from most consumer electronics, although home appliances still represent only a small part of its business.

More recently, it has offloaded other hardware and industrial businesses considered slow-growing, such as its power tools and chemicals businesses. It still manufactures heavy equipment such as trains and auto parts, but has invested more in services to help other industrial companies go digital.

Investors cheered, taking Hitachi’s share price near a 20-year high this year, although the stock fell 7.3% in Tokyo on Wednesday’s news.

In a recent column from the University of California, San Diego, business professor Ulrike Schaede said the rush to strike deals represents a “Hitachi shock” to other slow-to-change Japanese business groups.

“Hitachi is a good example of a business transformation that includes a change of identity from an electrical machinery manufacturer to an infrastructure data solutions company,” she said.

Write to Peter Landers at peter.landers@wsj.com