New Delhi, Dec 26 Coforge on Friday announced that it will acquire US-based engineering services firm Encora in a $2.35-billion all-stock deal, marking one of the largest transactions in India’s IT services space.
The acquisition will be carried out through a share swap, under which Coforge will issue 93.8 million equity shares priced at Rs 1,815.91 each.
This values the non-cash transaction at around Rs 17,032 crore. After the deal, Encora’s shareholders will own about 21.25 per cent of Coforge’s expanded equity capital.
In a statement released after its board meeting, Coforge said the acquisition will create a technology services company with a combined revenue base of around $2.5 billion.
The merged entity will have a strong focus on AI-led engineering, cloud, and data services, which are expected to contribute nearly $2 billion in revenue by FY27.
The company said AI-led product engineering alone could grow to more than $1.25 billion in revenue, while cloud services may contribute about $500 million and data engineering over $250 million.
Coforge added that the combined business is expected to operate at an EBIT margin of about 14 percent after amortisation of intangibles, and the transaction is not expected to dilute earnings.
Encora, which was founded in Silicon Valley, reported consolidated revenue of $516 million in FY25 and is expected to reach $600 million in FY26. The company operates with an adjusted EBITDA margin of 19 percent.
The acquisition will be funded primarily through equity worth $1.89 billion. The remaining amount will be met through a bridge loan or a qualified institutional placement to repay Encora’s existing term loan.
Coforge’s board has approved raising up to $550 million through a QIP or other permitted routes, though the company said a QIP may not be required if alternative funding arrangements are finalised.
Coforge said the deal will significantly strengthen its business across key verticals. Its HiTech and Healthcare segments are expected to immediately scale up, with each reaching a run-rate of about $170 million after the acquisition.
Encora brings AI-led healthcare solutions across pharma, medtech, and healthtech, along with 11 large clients that each generate more than $10 million in annual revenue. This will take the combined total of such large accounts to 45.
The acquisition also expands Coforge’s delivery footprint, particularly in nearshore locations. Encora adds more than 3,100 professionals across Latin America and strengthens Coforge’s presence in the US West and Midwest. As a result, Coforge’s North America business is expected to grow by about 50 percent to over $1.4 billion.
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