India’s Coforge To Acquire Encora In $2.35 Billion All-Stock Deal

SANTA CLARA, CA – Coforge has announced plans to acquire US-based engineering services firm Encora in a $2.35-billion all-stock deal, marking one of the largest transactions in India’s IT services sector.

Coforge Limited, formerly NIIT Technologies, is an Indian multinational IT company headquartered in Noida. Encora, founded by Venu Raghavan in Silicon Valley, reported consolidated revenue of $516 million in FY25 and is projected to reach $600 million in FY26, with an adjusted EBITDA margin of 19 percent.

The acquisition will be executed through a share swap, with Coforge issuing 93.8 million equity shares valued at Rs 1,815.91 each, bringing the transaction to approximately Rs 17,032 crore. After completion, Encora shareholders will hold about 21.25 percent of Coforge’s expanded equity capital.

In a statement following its board meeting on December 26, Coforge said the merger will create a technology services company with combined revenues of around $2.5 billion. The unified entity will focus on AI-led engineering, cloud, and data services, expected to generate nearly $2 billion in revenue by FY27. AI-led product engineering is projected to exceed $1.25 billion, cloud services around $500 million, and data engineering more than $250 million. Coforge also indicated the combined business is likely to operate at an EBIT margin of 14 percent post-amortization, with no expected earnings dilution.

The deal will be primarily funded through equity worth $1.89 billion, with the remainder financed via a bridge loan or qualified institutional placement (QIP) to repay Encora’s existing term loan. Coforge’s board has approved raising up to $550 million through a QIP, though the company may explore alternative funding options.

Coforge said the acquisition will strengthen its presence across key verticals. Its HiTech and Healthcare segments are expected to scale immediately, each reaching about $170 million in run-rate revenue. Encora adds AI-driven healthcare solutions for pharma, medtech, and healthtech, along with 11 clients generating more than $10 million annually, taking the combined total of such large accounts to 45. Coforge’s North America business is projected to grow by around 50 percent, exceeding $1.4 billion post-merger.  (with IANS input)