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India’s Coforge to acquire US-based Encora in $2.35-billion all-stock deal

Indian IT services company Coforge has announced plans to acquire US-headquartered digital engineering firm Encora in a $2.35 billion all-stock transaction, marking one of the largest deals in the global digital engineering space. The agreement confirms earlier reports that Coforge was in advanced talks for a major acquisition to strengthen its technology services portfolio.

The transaction will be carried out through a share swap, under which Coforge will issue approximately 93.8 million equity shares at a price of ₹1,815.91 per share. This implies a non-cash consideration of around ₹17,000 crore. Following the issuance, Encora’s shareholders will hold about 21.25 per cent of Coforge’s expanded equity base.

Coforge said the acquisition will create a combined technology services company with projected revenues of around $2.5 billion, significantly enhancing its scale and global reach.

Strategic Boost to AI, Cloud and Engineering Services

According to the company, the merger will strengthen its capabilities across AI-led engineering, cloud, and data services—areas seen as key growth drivers for enterprise technology spending. By FY27, nearly $2 billion of the combined revenue is expected to come from these segments.

AI-led product engineering alone is projected to scale beyond $1.25 billion in revenue, while cloud services could contribute roughly $500 million and data engineering more than $250 million. Coforge stated that the combined business is expected to operate at an EBIT margin of around 14 per cent after amortisation of intangibles, and the deal is not expected to dilute earnings.

Encora, founded in Silicon Valley, reported consolidated revenue of $516 million in FY25 and is projected to reach $600 million in FY26, with an adjusted EBITDA margin of about 19 per cent.

Funding Plan and Expansion Impact

The acquisition will primarily be funded through equity worth $1.89 billion, with the remaining amount to be met through a bridge loan or a qualified institutional placement to refinance Encora’s existing debt. Coforge’s board has approved plans to raise up to $550 million through a QIP or other permitted routes, although the company said this may not be required if alternative funding is finalised.

Coforge said the deal will immediately strengthen its HiTech and healthcare verticals and expand its nearshore delivery capabilities, particularly in Latin America. Encora brings more than 3,100 professionals across the region and a strong presence in the US market.

The transaction, subject to shareholder and regulatory approvals, is expected to close within four to six months.