Coforge announced a definitive agreement to acquire Encora in an all-stock deal valued at $2.35 billion, calling the acquisition a “defining moment” for the company as it builds capabilities in AI-driven engineering, data and cloud services.
Coforge CEO Sudhir Singh said on a conference call with analysts that the deal will establish significant AI-native engineering capabilities for the company as enterprise technology is being shaped by artificial intelligence, cloud and data.
Mr. Singh said Coforge's current management team, which was formed approximately eight and a half years ago, is driven by intensity of execution, high specialization in certain industries, and deep capabilities in emerging technologies, resulting in the highest growth rate among mid- and large-cap technology services companies.
Over this period, the company's revenue run rate has increased nearly five times and its market capitalization has increased nearly 20 times, he said.
Singh said the acquisition of Encora is aimed at building on that track record. He described the company as an approximately $2.5 billion technology services company with a $2 billion enterprise core of AI-driven engineering, data, and cloud services.
Founded in Silicon Valley, Encora provides AI-native software engineering services to digitally native and Fortune 1000 companies. Its services span intelligent process design, agent-native product engineering, core modernization, AI foundations, data preparation, and AI operations.
Singh highlighted Encora's composable AI platform, AIVA, which enables orchestration through agents, allowing organizations to build intelligent workflows across engineering and business functions.
He outlined five attributes that Coforge believes will differentiate Encora. An AI-native in-house agent platform, long-term relationships within large enterprises, a human-agent delivery model, a workforce mix geared toward AI-native engineering rather than labor arbitrage, and a service and software platform model.
According to Singh, the acquisition is expected to create substantial scale across services verticals by fiscal 2027, with AI-driven product engineering contributing $1.25 billion to the business, cloud services contributing $500 million to the business, and data engineering contributing approximately $250 million to revenue.
He added that the transaction will immediately expand Coforge's presence in the high-tech and healthcare sectors, with post-acquisition run rates expected to reach $170 million each.
Singh said Encora offers AI-driven healthcare solutions, including biomedical research assistants, AI-enabled patient monitoring, multi-omics data ingestion, and AI foundations for clinical trials.
The acquisition also expands Coforge's coastal delivery footprint in Latin America, where Encora has more than 3,100 delivery professionals, significantly increasing the company's presence in the Western and Midwest United States.
After the deal, Coforge's North American business is expected to grow by about 50% to $1.4 billion, Singh said.
The company will have 45 customer relationships, each of which will generate more than $10 million in annual revenue.
Encora offers 11 such relationships, with the top 10 customer relationships lasting more than 10 years on average.
Singh cited Coforge's track record of expanding relationships with acquired customers, including its previous acquisition of Signity.
Disclosing details of the deal, Chief Financial Officer Saurabh Goyal said Coforge will acquire 100% of Ancora's shares from Advent International, Warburg Pincus and other minority shareholders.
The transaction has an enterprise value of $2.35 billion, with stock consideration of $1.89 billion to be paid through a preferred allotment of Coforge stock. The company's board of directors has approved raising the remaining amount through qualified institutional investors.
Encora will generate revenue of about $600 million in FY26 with an adjusted EBITDA margin of about 19%, Goyal said.
In a separate statement, Shweta Jalan, managing partner at Advent International, said the investment reflects Advent's approach to supporting companies and management teams to build industry-leading companies.
