Coforge to acquire AI-native firm Encora for $2.35 Bn
Coforge will acquire AI-native firm Encora for $2.35 billion. The combined entity expects AI-led engineering, Data, and Cloud services to generate $2 billion revenue by FY27. Encora's FY26E revenue is $600 million with a ~19% Adjusted EBITDA margin. The transaction will be funded via preferential allotment, making it EPS accretive in FY27.
This is a major strategic acquisition for Coforge, significantly expanding its market presence, service offerings, and revenue potential in key growth areas like AI and Cloud. The scale of the transaction ($2.35 billion) and its impact on future revenue and profitability highlight a high impact.
The acquisition of Encora is expected to significantly enhance Coforge's capabilities in AI-led engineering, data, and cloud services, creating a larger, more competitive entity with substantial revenue growth projections. The deal is also anticipated to be EPS accretive, indicating positive financial impact.
Coforge Limited has announced the signing of definitive agreements to acquire Encora, an AI-native firm specializing in AI-driven engineering, Cloud, and Data.
The acquisition is expected to create a technology services powerhouse with approximately $2.5 billion in revenue. The combined entity anticipates that AI-led engineering, Data, and Cloud services alone will generate $2 billion in revenue by FY27. Specifically, the AI-led product engineering business is projected to reach over $1.25 billion, Cloud services around $500 million, and Data engineering approximately $250 million.
Encora, founded in Silicon Valley, brings strengths in AI-driven engineering and operates at the intersection of AI, Cloud, and Data. It has developed an agentic AI platform called AIVA™ and holds deep partnerships with major cloud providers like AWS, Microsoft, and Google, as well as Snowflake.
The transaction is valued at an Enterprise Value of $2.35 billion, with Encora's FY26E revenue projected at $600 million and an Adjusted EBITDA margin of approximately 19%. Coforge plans to fund the acquisition through a preferential allotment of equity shares, valuing the equity at approximately $1.89 billion, which will result in Encora shareholders holding about 20% of the expanded share capital upon completion.
Post-acquisition, Coforge expects the combined business to operate at a 14% EBIT margin, with the acquisition projected to be EPS accretive in FY27. The deal will significantly expand Coforge's West and Mid-West US client footprint and provide scaled near-shore delivery capabilities in LATAM with over 3100 SMEs. The combined firm is expected to have forty-five US$10 million+ client relationships.
Sudhir Singh, CEO of Coforge, stated that the acquisition is a defining moment, establishing a scaled AI-led engineering capability moat for the firm. Shweta Jalan, Managing Partner at Advent, expressed delight that Encora is joining forces with Coforge.
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Coforge Limited filed this with the NSE as a statutory disclosure, categorised under acquisition. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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See the model portfoliosA plain-language summary of a public exchange filing by Coforge Limited. Read the original for the full detail.