Coforge to Acquire Encora for $2.35Bn via Share Swap, Raise up to $550Mn
Coforge Limited will acquire Encora for $2.35 billion through a share swap, issuing 9,37,96,508 equity shares at ₹1,815.91 each. The company also plans to raise up to $550 million via QIP. The deal is expected to create a $2.5 billion tech services firm and is anticipated to complete in 4-6 months.
The acquisition of Encora for $2.35 billion and the potential capital raise of $550 million are transformative events that will significantly alter Coforge's scale, market presence, and financial structure, warranting a high impact assessment.
The acquisition of Encora is a significant strategic move expected to enhance Coforge's market position, scale its operations, and drive future growth, supported by a substantial capital raise. These factors indicate a positive outlook for the company.
Coforge Limited's Board of Directors has approved a significant strategic move: the acquisition of Encora US Holdco, Inc. and Encora Holdings Ltd. (Cayman) for an enterprise value of $2.35 billion. This acquisition will be executed through a share swap arrangement, involving the issuance of 9,37,96,508 Coforge equity shares at a price of ₹1,815.91 per share, aggregating to ₹1,70,32,60,16,842 (approximately ₹17,032.60 crore). This transaction is expected to create a $2.5 billion tech services powerhouse, with projected revenues of nearly $2 billion from AI-led engineering, cloud, and data services by FY27.
The acquisition aims to position Coforge as a leader in AI-led engineering services, leveraging Encora's AI-native DNA and its AIVA platform. The combined entity is expected to significantly scale Coforge's HiTech and Healthcare verticals, expand its nearshore delivery capabilities in LATAM, and increase its client footprint in the US West and Midwest. The deal is structured as an all-stock transaction, with sellers rolling over their investment into Coforge, reflecting confidence in the expanded firm's prospects.
In conjunction with the acquisition, Coforge also approved raising capital of up to $550 million (approximately ₹4,577 crore) through a Qualified Institutions Placement (QIP) or other permitted modes. This capital will be used to retire Encora's existing term loan. The company also approved an increase in its authorized share capital from ₹77 crore to ₹102 crore to accommodate the new share issuances. Furthermore, the Board approved the grant of special rights to the investors, including the appointment of two nominee directors on Coforge's Board, and amendments to the company's articles of association.
The acquisition is subject to shareholder and regulatory approvals, including from the Reserve Bank of India and US authorities, and is expected to be completed within 4 to 6 months. The company will seek shareholder approval for these proposals through a postal ballot.
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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.