Coforge announces $2.35 billion acquisition of US-based AI firm Encora

The acquisition will be funded through a preferential issue of equity shares worth about $1.89 billion, following which Encora's shareholders are expected to own around 20% of Coforge's share capital

Tech service provider Coforge on Friday said that it has signed definitive agreements to acquire Encora, a United States-based firm that provides artificial intelligence (AI)-driven engineering services.

 

The Noida-headquartered company will buy Encora from private equity investors Advent International and Warburg Pincus in a transaction valued at $2.35 billion.

 

Coforge said the acquisition will be financed through a preferential issue of equity shares worth about $1.89 billion, following which Encora’s shareholders are expected to own around 20 per cent of Coforge’s expanded share capital.

 

Encora, founded in Silicon Valley, provides AI-driven engineering services to Fortune 1000 enterprises and digital-native companies, operating across AI, cloud and data, Coforge said in a BSE filing.

 

 

Encora's estimated revenue for the financial year 2025-26 (FY26) stands at $600 million, with an adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin of about 19 per cent, it added.

 

“The Encora acquisition is a defining moment for our organisation. It establishes a scaled AI-led engineering capability moat for the firm underpinned by capabilities to help create enterprise data cores and cloud foundations purpose-built for AI,” said Sudhir Singh, chief executive officer (CEO) and executive director of Coforge.

 

Post-acquisition, the combined entity is expected to have annual revenues of $2.5 billion, with AI-led engineering, data and cloud services alone likely to deliver $2 billion revenue in FY27, Coforge said.

 

The deal will also expand Coforge’s near-shore delivery capabilities in Latin America, adding an engineering and AI workforce of over 3,100 specialists, primarily focused on serving US clients. Coforge said the transaction will broaden its client base in the western and midwestern US regions, which currently contribute about a quarter of its US revenues.

 

Shares of Coforge closed at ₹1673.25 apiece, down 3.7 per cent on the BSE on Friday.