Coforge to Acquire US Based Encora in 2.35 Billion Dollar All Stock Deal to Boost AI Led Engineering Capabilities

Deal Type : Acquisition (All-Stock)

Estimated Value : $2.35 billion (Enterprise Value)

Deal Status : Definitive agreement announced; subject to regulatory and shareholder approvals

Overview

Indian IT services firm Coforge has formally announced its plan to acquire Encora, a US-based engineering services and AI solutions company, in an all-stock transaction valued at approximately $2.35 billion. The board of Coforge has also approved a plan to raise up to $550 million to partially fund the deal and refinance existing debt, highlighting the strategic financial planning behind the acquisition.

Strategic Rationale

This transaction represents one of the largest acquisitions in the digital engineering and AI services space by an Indian IT firm. Encora’s strong engineering capabilities in AI-led product development, cloud, and data engineering align with Coforge’s strategy to expand beyond traditional IT services into high-growth domains that are critical for future digital transformation.

According to Coforge’s management, the combined entity is expected to operate as a $2.5 billion tech services powerhouse, enhancing competitiveness in areas where enterprise adoption of AI and cloud solutions is rapidly accelerating.

About Encora

Encora is a global engineering services firm with significant expertise in AI, cloud computing, and data engineering services. Backed by private equity investors including Advent International and Warburg Pincus, Encora brings strong client relationships and delivery capabilities, especially within the U.S. and Latin American markets.

The company reported revenues of around $516 million in FY25, with margins that strengthen the combined profile of Coforge once the transaction concludes.

Deal Structure & Funding

The acquisition will be executed via an all-stock share swap, with Coforge issuing approximately 93.8 million equity shares as consideration.

Encora’s shareholders are expected to receive roughly 21.25% equity in the combined company, aligning incentives and facilitating a smooth integration.

Coforge plans to fund the deal with $1.89 billion in preference share issuance and has approved a $550 million fundraise through potential routes such as a Qualified Institutional Placement (QIP) or bridge financing.

This mix aims to preserve the company’s balance sheet while enabling strategic investments in growth segments like AI-driven engineering.

Competitive Landscape & Market Positioning

With this acquisition, Coforge is poised to strengthen its position against other mid-tier and large IT services players by significantly enhancing its AI, cloud, and data engineering capabilities. The enlarged scale and enhanced service portfolio are expected to support higher engagement with enterprise clients, especially in the U.S., Latin America, and other key markets.

Industry analysts view this move as part of a broader trend where traditional IT firms are aggressively expanding into next-generation technology services, driven by demand for AI, automation, and digital transformation solutions.

Operational Synergies & Growth Outlook

The combined entity is expected to deliver approximately $2 billion in revenues by FY27, driven by AI-led engineering, cloud services, and digital transformation engagements.

Coforge expects significant margin improvements and cross-sell opportunities across both its legacy business and the newly acquired capabilities.

The acquisition also expands Coforge’s nearshore delivery footprint, particularly in the U.S. West and Midwest, with Encora’s workforce contributing over 3,100 professionals.

Integration & Future Prospects

While the deal still awaits final shareholder and regulatory clearances, Coforge anticipates closing the transaction within the next four to six months. Once completed, the acquisition will significantly expand Coforge’s market reach and technical depth, positioning it to compete more effectively in the evolving global IT services landscape.

The partnership with Encora is expected to enhance Coforge’s ability to deliver enterprise-grade AI solutions across multiple industries, accelerating its ambition to become a leading global player in AI-driven digital engineering services.