Coforge Ltd. has agreed to acquire Encora Inc., a Silicon Valley-based software engineering firm, at an enterprise valuation of $2.35 billion, betting on the surging demand for AI-driven technology services.
The Coforge-Encora acquisition deal will be funded through a preferential allotment of equity shares valued at approx. $1.89 billion. Upon completion, Encora’s current shareholders—including Advent International and Warburg Pincus—will hold approximately 20% of the expanded share capital of Coforge.
“The Encora acquisition is a defining moment for our organisation,” Coforge’s Chief Executive Officer Sudhir Singh said in a statement. “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.”
The acquisition underscores the intense race among Indian IT services firms to build capabilities in Generative AI and cloud computing.
The combination is expected to create a technology services entity with roughly $2.5 billion in annual revenue. Coforge projects that the combined firm’s AI-led engineering, data, and cloud services alone will generate $2 billion in revenue by the fiscal year ending 2027.
Encora, which markets itself as an “AI-native” firm, is projected to post revenue of $600 million for the fiscal year 2026, with an adjusted EBITDA margin of approximately 19%. The firm specializes in digital engineering services for Fortune 1000 companies and operates a proprietary agentic AI platform.
Financial Impact and Synergy
Coforge expects the acquisition to be accretive to earnings per share (EPS) in the fiscal year 2027. The combined business is targeting an EBIT margin of 14%.
Post-acquisition, Coforge’s presence in the U.S. market is set to expand significantly. The deal will bolster the company’s footprint in the West and Mid-West regions, which previously accounted for only a quarter of its U.S. revenue. Additionally, the merger will provide scaled near-shore delivery capabilities in Latin America, adding over 3,100 subject matter experts to Coforge’s talent pool.
Specific industry verticals are also expected to see immediate scale. The company’s Hi-Tech and Healthcare verticals will each operate at an annualized revenue run rate exceeding $170 million following the close of the deal.
BDA Partners acted as the exclusive investment banker for the transaction. Legal representation was provided by JSA for Coforge and Khaitan & Co. for Encora.
“We are looking forward to continuing our partnership with Sudhir and the management team to build one of the most admired AI-led engineering companies globally,” said Shweta Jalan, Managing Partner at Advent International.
The transaction remains subject to customary closing conditions and regulatory approvals.
