Coforge has taken a decisive step in its growth journey, announcing the acquisition of US-based digital engineering firm Encora in a $2.35-billion all-stock transaction, a move that firmly positions the company among the fastest-scaling technology services players focused on AI-led engineering, cloud, and data services.
The deal, approved by Coforge’s board on December 26, will be executed through a share swap, under which the company will issue 93.8 million equity shares at ₹1,815.91 apiece. This implies a non-cash consideration of approximately ₹17,032 crore and will result in Encora’s shareholders owning about 21.25 percent of Coforge’s post-issue equity capital. Once completed, the transaction will create a combined technology services entity with projected revenues of around $2.5 billion.
For Coforge, the acquisition is not merely about size but about sharpening its strategic focus on high-growth digital segments. The company expects nearly $2 billion of the combined revenue to come from AI-led engineering, cloud, and data services by FY27. AI-driven product engineering alone is projected to scale beyond $1.25 billion, while cloud services are expected to contribute about $500 million and data engineering over $250 million, underscoring the increasing centrality of AI and digital platforms to enterprise technology spending.
Encora, founded in Silicon Valley, reported consolidated revenues of $516 million in FY25 and is projected to reach $600 million in FY26, with an adjusted EBITDA margin of 19 percent. Coforge has indicated that the combined business is expected to operate at an EBIT margin of roughly 14 percent after amortisation of intangibles, and importantly, the transaction is not expected to be earnings-dilutive. This reflects a disciplined approach to valuation and integration, even as the company undertakes one of the largest deals in the digital engineering space.
The funding structure of the acquisition combines equity worth $1.89 billion with additional financing through a bridge loan or alternative mechanisms to retire Encora’s existing term loan. In parallel, Coforge’s board has approved plans to raise up to $550 million via a qualified institutional placement or other permitted routes, although the company has clarified that a QIP may not be required if other funding options are finalised.
Strategically, the acquisition significantly strengthens Coforge’s position in the HiTech and healthcare verticals, both of which are expected to reach a run rate of around $170 million post-acquisition. Encora brings with it deep expertise in AI-led healthcare solutions across pharma, medtech, and healthtech, along with 11 enterprise clients generating over $10 million in annual revenues each. This takes the combined entity’s base of large strategic accounts to 45, enhancing revenue visibility and cross-selling potential.
Geographically, the deal expands Coforge’s delivery footprint and market reach. Encora’s nearshore presence, with over 3,100 professionals across Latin America, adds scale to Coforge’s global delivery model and strengthens its access to US clients, particularly in the West and Midwest regions. Following the acquisition, Coforge expects its North America business to grow by nearly 50 percent, crossing the $1.4-billion mark.
Encora is being acquired from private equity investors including Advent International and Warburg Pincus, both of whom will roll over their holdings into Coforge equity. The investors will have the right to nominate two directors to Coforge’s board and participate in key committees, though the company has clarified that there will be no change in control.
The transaction remains subject to shareholder and regulatory approvals, including clearances from the Reserve Bank of India and overseas antitrust authorities, and is expected to close within four to six months.
With this acquisition, Coforge signals a clear intent to pivot decisively toward AI-led digital engineering at scale. At a time when global enterprises are accelerating investments in AI, cloud modernization, and data platforms, the Encora deal gives Coforge both the capabilities and the geographic reach to compete more aggressively in the global technology services market.
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