Coforge has announced a definitive agreement to acquire 100% of Encora from Advent International and Warburg Pincus for $2.35 billion. The deal will be financed through equity of $1.89 billion via a preferential allotment and a bridge loan/QIP. Encora shareholders will hold approximately 20% of Coforge. The acquisition aims to establish Coforge as a leader in AI-led engineering and is expected to close within 4-6 months, subject to regulatory approvals.
Strategic Acquisition of Encora
Coforge is set to acquire Encora in a deal valued at $2.35 billion. This acquisition will be executed through a share swap agreement, positioning Coforge as a significant player in AI-led engineering services. The transaction involves Coforge acquiring 100% of Encora’s shares from Advent International and Warburg Pincus. The definitive agreement was signed on December 26, 2025, marking a pivotal moment for Coforge.
Financial Details and Structure
The acquisition will be financed through an equity infusion of $1.89 billion, which will be paid in the form of equity shares via preferential allotment. Additionally, a bridge loan or Qualified Institutional Placement (QIP) of up to $550 million will be utilized to retire Encora’s existing term loan. Following the transaction, Encora’s shareholders are expected to hold approximately 20% of Coforge. The sellers are rolling over into Coforge and not taking any consideration as cash.
Rationale Behind the Acquisition
This acquisition is expected to establish a scaled AI-led Engineering, Data, and Cloud services capability for Coforge. It will enhance Coforge’s industry-leading growth and position the company as a leader in delivering AI-infused solutions. The combined entity is projected to achieve nearly $2 billion in revenue from enterprise core services by FY’27. Further, the deal will immediately scale Coforge’s HiTech and Healthcare verticals, expand its nearshore capabilities in LATAM, and increase its client footprint in the US West and Midwest.
Projected Financial Impact
Encora’s financials demonstrate steady growth, and the acquisition is not expected to dilute earnings per share. With Encora’s current margin profile, the combined business is expected to operate at an EBIT margin of 14% after amortization of intangibles. Coforge anticipates that Encora will contribute US$600 million in revenue with Adjusted EBITDA of 19% by FY26E, significantly enhancing Coforge’s financial strength.
Approvals and Timeline
The acquisition is subject to shareholder and regulatory approvals, including those from the Reserve Bank of India and US authorities. It is anticipated that the deal will close within 4 to 6 months from the signing date. Key approvals also include those related to antitrust regulations in Australia, Romania, and Spain.
Capital Raise Authorization
Coforge is also planning to raise funds by issuing equity shares and/or other eligible securities for an aggregate amount not exceeding USD 550 million via qualified institutional placement (QIP) or other permissible modes.
Increase in Authorized Share Capital
The authorized share capital of the company will increase from INR 77,00,00,000 to INR 1,02,00,00,000, divided into 51,00,00,000 equity shares of INR 2 each.
Source: BSE
