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Coforge to acquire US-based AI firm Encora in $2.35-billion, share-swap deal
The Coforge-Encora deal is a “defining moment” that establishes a “scaled AI-led engineering capability moat” for the Noida-based firm, CEO Sudhir Singh says.
Coforge Ltd. has agreed to acquire Encora Inc., a Silicon Valley-based software engineering firm, at an enterprise valuation of $2.35 billion, betting on the surging demand for AI-driven technology services.
The Coforge-Encora acquisition will be funded via a preferential allotment of equity shares valued at about $1.89 billion, according to an exchange filing on Friday (26 December 2025). Coforge will also pay off Encora's debt through a fundraising of up to $500 million, by way of a bridge loan or via a qualified institutional placement of its shares.
Upon completion of the deal, Encora’s current shareholders—including private equity firms Advent International and Warburg Pincus—will hold about 20% of the expanded share capital of Coforge.
“The Encora acquisition is a defining moment for our organisation,” Coforge's Chief Executive Officer Sudhir Singh said in a statement. “It establishes a scaled AI-led engineering capability moat for the firm, underpinned by capabilities to help create enterprise data cores and cloud foundations purpose built for AI.”
Coforge-Encora deal: Financial outlook
The Coforge-Encora combine is expected to create a technology services entity with roughly $2.5 billion in annual revenue, of which $2 billion will come from AI-led engineering services alone. That would help the Noida-based company leapfrog Persistent Systems Ltd., Mphasis Ltd. and Hexaware Technologies Ltd. to become India's seventh largest IT services firm.
Encora, which markets itself as an “AI-native” firm, is projected to post revenue of $600 million for FY26, with an adjusted EBITDA margin of ~19%. The firm specialises in digital engineering services for Fortune 1000 companies and operates a proprietary Agentic AI platform.
Coforge expects the acquisition to be accretive to earnings per share in FY27. The combined business is targeting an EBIT margin of 14%.
Coforge-Encora deal: The US angle
Financials aside, the Encora acquisition will expand Coforge's footprint in the United States—especially in the West and Midwest regions that accounted for only a quarter of its US revenue. Additionally, the merger will provide scaled near-shore delivery capabilities in Latin America, adding over 3,100 subject matter experts to Coforge's talent pool.
Specific industry verticals are also expected to see immediate scale. Coforge's hi-tech and healthcare verticals will each operate at an annualised revenue run rate exceeding $170 million following the close of the deal.
“We are looking forward to continuing our partnership with Sudhir (Singh) and the management team to build one of the most admired AI-led engineering firms globally,” said Shweta Jalan, managing partner at Advent International.
BDA Partners acted as the exclusive investment banker for the Coforge-Encora deal, which is likely to close in six months—subject to regulatory approvals. Legal representation was provided by JSA for Coforge and Khaitan & Co. for Encora.
On Friday, Coforge shares fell 3.70% to ₹1,673.25 apiece on the BSE even as the benchmark Sensex ended the day 0.43% lower at 85,041.45 points.
