Coforge Bets Big on AI Engineering With $2.35 Billion Encora Deal
The acquisition deepens Coforge’s push into AI-native engineering and expands its footprint in North America and near-shore delivery.
Topics
News
- Coforge Bets Big on AI Engineering With $2.35 Billion Encora Deal
- Inside Uttar Pradesh Police’s Bet on AI-First Policing
- AfterLife Uses AI Telephony, UPI to Simplify Digital Wills in India
- India Tech M&As Hit a Three-Year High on Consolidation Push
- Sam Altman Calls for a Head of Preparedness at OpenAI
- India Faces Lower Risk of AI Job Disruption Than the West, Says IT Secretary
[Image source: Chetan Jha/MITSMR India]
Coforge, the Noida-based IT services and digital engineering firm formerly known as NIIT Technologies Ltd, has agreed to acquire Encora in a $2.35 billion all-stock deal, marking one of the largest outbound acquisitions by an Indian technology services company.
The transaction will see Coforge acquire 100% of Encora, a US-headquartered product engineering and AI-native services firm backed by Advent International and Warburg Pincus. The deal is expected to close within four to six months, subject to regulatory and shareholder approvals.
Under the terms announced, Coforge will issue about 93.7 million shares, valued at roughly $1.89 billion, giving Encora’s shareholders around 21% ownership in the combined entity.
Coforge also plans to raise up to $550 million through a bridge loan or a qualified institutional placement (QIP) to refinance Encora’s existing term loan.
“This transaction is transformational for Coforge,” chief executive Sudhir Singh said.
Encora is projected to generate around $600 million in revenue in FY26 and operates with an Ebitda margin of over 19%, according to analyst estimates.
Ebitda, or earnings before interest, taxes, depreciation and amortization, is a measure of profitability.
Research firm Nuvama said the acquisition positions Coforge to build a scaled, AI-led engineering services platform with deeper exposure to hi-tech, healthcare, and near-shore US delivery, supported by Encora’s Latin America workforce.
This deal accelerates Coforge’s transition toward platform-led and AI-driven services, Nuvama said in a note, estimating the combined entity could generate $2.5 billion in annual revenue by FY27, with North America contributing nearly $1.4 billion.
Coforge expects the business to operate at around a 14% Ebit margin post-amortization of acquisition-related intangibles.
