Coforge will acquire Encora in a deal valued at $2.35 billion, financed through equity and debt. The acquisition aims to establish Coforge as a leader in AI-led engineering and cloud services. Encora’s shareholders will hold approximately 20% of Coforge. The deal is expected to enhance Coforge’s HiTech and Healthcare verticals and significantly expand its presence in North America and LATAM. The transaction is expected to close within 4 to 6 months.
Strategic Acquisition of Encora
Coforge has announced its acquisition of Encora for an enterprise value of $2.35 billion. This move is set to significantly enhance Coforge’s capabilities in AI-led engineering, data, and cloud services. The acquisition, announced on December 26, 2025, aims to create a $2.5 billion tech services powerhouse.
Deal Terms and Financing
The acquisition will be financed through an equity component of $1.89 billion, paid via equity shares issued to Encora’s shareholders, and a bridge loan or Qualified Institutional Placement (QIP) of up to $550 million. Following the transaction, Encora’s shareholders will hold approximately 20% of Coforge.
Synergies and Expected Benefits
The acquisition is expected to provide several key benefits for Coforge:
- Scale Coforge’s HiTech and Healthcare verticals.
- Expand nearshore delivery capabilities in LATAM.
- Increase client footprint in the US West and Midwest.
The combined entity is projected to achieve nearly $2 billion in revenue from AI-led engineering, cloud, and data services by FY27. Encora’s current margin profile is projected to allow the combined business to operate at an EBIT margin of 14% post amortization.
Financial Performance of Encora
Encora’s consolidated turnover for FY26E is projected at $600 million with an Adjusted EBITDA of 19%. In FY24 and FY25, the consolidated turnover was $481 million and $516 million, respectively.
Revised Share Capital
To facilitate the equity issuance, Coforge will increase its authorized share capital from INR 77 crore to INR 102 crore, divided into 51 crore equity shares of INR 2 each.
Capital Raise Authorization
The board has authorized raising capital up to USD 550 million through a Qualified Institutions Placement (QIP) or other permissible means, subject to shareholder and regulatory approvals.
Timeline for Completion
The acquisition is expected to be completed within 4 to 6 months, pending shareholder and regulatory approvals, including those from the Reserve Bank of India and US authorities.
Source: BSE
