Coforge has signed a definitive agreement to acquire Encora, a Silicon Valley-born AI-native company with deep strengths across cloud and data-based AI-driven engineering. The transaction is subject to customary closing conditions and regulatory approvals.
Encora is one of a select group of technology services companies built with AI-native DNA, providing engineering services to Fortune 1000 and digitally native companies. The company operates on the convergence of AI, cloud, and data, with capabilities across intelligent process design, agent-native product engineering, core modernization, AI foundations, data enablement, and AIOps. Encora is building AIVATM, one of the industry's first composable agent AI platforms, with deep partnerships with AWS, Microsoft, Google, and Snowflake.
Coforge's acquisition of Encora creates an approximately USD 2.5 billion technology services powerhouse with expected revenues of USD 2 billion in 2027 from AI-driven engineering + data + cloud services alone. For the company, AI-driven product engineering is likely to be a US$1.25 billion+ business, cloud services is a ~$500 million+ business, and data engineering is likely to be a ~$250 million+ business.
Additionally, Coforge's high-tech and healthcare industry segments are expected to reach significant size soon after the acquisition. Both companies will individually operate with a revenue run rate of more than US$170 million per year. This acquisition repositions Coforge as a player with large nearshore delivery capabilities in Latin America, with a strong engineering and AI talent base of more than 3,100 small and medium-sized businesses serving U.S. customers. This will significantly expand Coforge's customer base in the West and Midwest, which before the acquisition only contributed 25% to Coforge's U.S. sales. The combined company will have scalable relationships with 45 companies valued at more than $10 million. Given our outstanding track record of successful acquisitions, Coforge believes we can substantially and rapidly expand our relationships with these customers.
Transaction details
Encora's FY26E revenues were US$600 million, with an adjusted EBITDA margin of approximately 19%.
Coforge will acquire the business from Advent, Warburg Pincus and other minority shareholders for an enterprise value of $2.35 billion. The transaction will be financed through a preferential allotment of shares representing an equity value of approximately US$1.89 billion, pursuant to which Encora shareholders will hold approximately 20% of Coforge's expanded share capital upon completion of the transaction.
The combined business is expected to operate with an EBIT margin of 14% and the acquisition is expected to be EPS accretive in FY27.
“The acquisition of Encora is a defining moment for our organization. It establishes a large moat of AI-driven engineering capabilities for the company, backed by the ability to help create an AI-only enterprise data core and cloud foundation. With a $2 billion enterprise core of AI-driven engineering, data, and cloud services, the new $2.5 billion company will be the benchmark for enterprises to realize the promise of AI. Last 8 Over the past year, Coforge has delivered industry-leading growth. We believe this enhanced enterprise AI-driven engineering core will further accelerate our growth and propel us to a higher trajectory.”
“Coforge's investment in Encora is a testament to Advent's philosophy of investing in promising businesses, working with talented management teams, and developing these businesses into industry leaders. We are pleased that Encora has found the right home and is partnering with Coforge. We look forward to continuing our partnership with Sudhir and the management team to build one of the most admired AI-driven engineering companies in the world,” said Shweta Jalan, Managing Partner at Advent.
BDA Partners acted as exclusive investment banker on this transaction. JSA and Khaitan & Co represented Coforge and Encora respectively.
