IT services firm Coforge has said it will acquire a 100 per cent stake in US-based AI firm Encora for an enterprise value of $2.35 billion (about Rs 21,133 crore). Its board has also approved a fundraising
plan of $550 million.
The acquisition will be funded through an all-stock transaction. Coforge will issue preferential shares worth about $1.89 billion to Encora’s current shareholders, including private equity giants Advent International and Warburg Pincus. Upon completion, the sellers will hold a 20 per cent stake in the expanded share capital of Coforge.
“Coforge has signed a definitive agreement to acquire 100 per cent shares of Encora from Advent International, Warburg Pincus and other minority shareholders. The enterprise value of the transaction is $2.35 billion,” Coforge said in a regulatory filing.
Coforge CEO and Executive Director Sudhir Singh said the acquisition establishes a scaled AI-led engineering capability moat for Coforge, underpinned by capabilities to help create enterprise data cores and cloud foundations purpose-built for AI.
Encora, an AI-native firm providing software engineering services, is projected to report a revenue of $600 million for FY26 with an adjusted EBITDA margin of approximately 19 per cent.
“Coforge’s acquisition of Encora will create a $2.5 billion tech services powerhouse wherein AI-led engineering + Data + Cloud services alone are likely to deliver $2 billion revenue in FY27. AI-led product engineering business is likely to be a $1.25 billion+ business, Cloud services a $500 million business, and Data engineering a $250 million+ business for the firm. Furthermore, Hi-Tech and Healthcare industry verticals of Coforge are expected to reach material scale immediately post-acquisition. They will both individually operate at an annualised $170 million+ revenue run rate,” Coforge said.
According to the company filing, the transaction will also involve a bridge loan or a qualified institutional placement of up to $550 million to retire Encora’s existing debt.
The deal has been agreed at a share price of Rs 1,815 per share, representing an 8.5 per cent premium to Friday’s close.
(With Inputs from Reuters)
