Coforge to Acquire US-Based Encora in $2.35 Billion All-Stock Deal

Coforge has entered into a definitive agreement to acquire US-based tech firm Encora in an all-stock deal valued at $2.35 billion, marking one of the largest outbound acquisitions by an Indian IT company. The acquisition is aimed at creating a $2.5 billion global tech services powerhouse with enhanced capabilities in AI-led engineering, cloud, and data services. Under the deal, Coforge will issue equity worth $1.89 billion via preferential allotment to Encora’s stakeholders — led by private equity firms Warburg Pincus and Advent International — who will collectively hold about 20% stake in the combined entity post-closing. The remaining $550 million will be financed through a bridge loan or a proposed Qualified Institutional Placement (QIP) to retire Encora’s term loan. Encora, headquartered in Silicon Valley, reported revenues of $516 million in FY25, expected to grow to $600 million in FY26. It brings strong client relationships — 11 clients over $10M, with top accounts lasting 10+ years — and a 3,100+ near-shore delivery team across Latin America. The combined company is projected to achieve an EBIT margin of 14% post-amortization, driven by synergies. Shareholder approval is targeted within 30 days, with regulatory clearances expected in 4–6 months. Coforge also issued a postal ballot seeking approvals for: Raising authorized capital Allotting 93.8 million shares worth ₹1.7 lakh crore at ₹1,815.91/share Authorizing a $550 million QIP A minor correction was made to post-merger shareholding numbers, but all key terms remain unchanged. This strategic move positions Coforge as a more competitive global player, expanding its footprint in high-growth digital and AI-driven enterprise solutions.