Coforge on Friday said that it has agreed to acquire US-based digital engineering firm Encora in an all-stock transaction valued at an enterprise value of $2.35 billion (around Rs 21,140 crore), marking one of the largest overseas acquisitions by an Indian mid-tier IT services company and signalling a sharper strategic shift towards AI-led engineering, data and cloud services.
The deal pegs Encora’s equity value at about $1.89 billion (around Rs 17,000 crore) and will see Coforge acquire 100% of the company from private equity investors Advent International, Warburg Pincus and other minority shareholders. The balance between the equity value and enterprise value, amounting to up to $550 million (around Rs 4,100 crore), will be used to retire Encora’s existing term loan.
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Coforge said the transaction will be executed entirely through a share swap, with no cash consideration being paid to the selling shareholders. As part of the acquisition, Coforge will issue about 93.8 million equity shares at an issue price of Rs 1,815.91 per share, implying a premium of about 8.5% to the company’s closing price on Friday. Post-transaction, Encora’s shareholders will collectively hold about 20–21% of Coforge’s expanded equity capital.
The company said the debt repayment component will be funded through a bridge facility or a qualified institutional placement, if required. Its board has approved raising up to $550 million (around Rs 4,100 crore) through a QIP or other permitted routes, although Coforge said a share sale may not be triggered if alternative funding options are finalised.
“This reflects the confidence that the incoming shareholders have in the prospects of the expanded firm,” Coforge said in its exchange filing, adding that the transaction would create a technology services company with projected annual revenue of about $2.5 billion (around Rs 22,500 crore).
Building a $2 Billion Digital Core
Encora, headquartered in the US with delivery centres across Latin America, reported consolidated revenue of $516 million (around Rs 4,600 crore) in FY25 and is expected to post revenue of about $600 million (around Rs 5,400 crore) in FY26. The company operates at an adjusted Ebitda margin of about 19%. Coforge said the acquisition is not expected to be earnings-per-share dilutive, supported by Encora’s margin profile and expected synergies. Post-acquisition, the combined entity is expected to operate at an Ebit margin of about 14% after amortisation of intangibles.
Coforge’s own revenue for FY25 stood at about $1.4 billion (around Rs 12,600 crore). The acquisition is expected to materially increase the share of AI-led engineering, data and cloud services in the combined portfolio, with these segments projected to contribute close to $2 billion (around Rs 18,000 crore) in revenue by FY27. Within this, AI-led product engineering alone is expected to scale to over $1.25 billion (around Rs 11,000 crore), with cloud services contributing about $500 million (around Rs 4,200 crore) and data engineering over $250 million (around Rs 2,000 crore).
Beyond scale, Coforge positioned the deal as a step-change in capability, particularly in higher-value digital engineering work at a time when demand for traditional outsourcing services has slowed. Encora brings strengths across software, healthcare and fintech, along with a strong near-shore delivery model.
Geographic Rebalancing and Client Scale
The acquisition is also expected to strengthen Coforge’s client base. Post-transaction, the combined entity will have 45 client relationships generating more than $10 million each annually, with Encora contributing 11 such accounts. Coforge said the top 10 Encora client relationships have an average tenure of more than a decade.
Coforge said it expects to leverage its experience from past acquisitions, including Cigniti, to scale accounts through cross-selling and deeper client engagement. The deal is also expected to rebalance the company’s geographic and industry mix. Coforge’s North America business is projected to expand by about 50% to over $1.4 billion (around Rs 11,600 crore), aided by Encora’s presence in the US West and Midwest and a near-shore delivery base of more than 3,100 professionals across Latin America.
Encora’s investors will roll over their holdings into Coforge equity and will have the right to nominate two directors to Coforge’s board, though the company said there will be no change in control.
The transaction is subject to shareholder and regulatory approvals, including from the Reserve Bank of India and overseas antitrust authorities. Coforge expects shareholder approval within 30 days of signing, with closing targeted within four to six months.
