Coforge Limited has announced the acquisition of Encora for US$2.35 billion, marking the largest acquisition ever undertaken by an Indian IT services company.
Under the terms of the transaction, Encora is valued at 3.9x enterprise value to sales and 20.6x EV to adjusted EBITDA, both representing a premium to Coforge’s current trading multiples. The consideration structure includes the issuance of US$1.9 billion in Coforge equity to Encora’s existing shareholders at a price of Rs1,815 per share. In addition, Coforge may raise up to US$550 million through a qualified institutional placement (QIP), primarily to refinance Encora’s existing term loan.
The transaction is expected to close within approximately six months, subject to customary regulatory and shareholder approvals. Upon completion, the acquisition is projected to increase Coforge’s FY27 top line by 28%, adding roughly US$600 million in annual revenue.
Founded in 2005 in the United States, Encora is an AI-native engineering services firm with capabilities spanning strategy and design, core modernization, agentic AI solutions, intelligent operations, and agent-native product engineering. The company serves 131 large enterprise clients, each with relationships exceeding US$1 million in value.
Encora has built a strong near-shore delivery footprint in Latin America, employing more than 3,100 engineering and AI specialists, predominantly serving US-based clients. Between FY23 and FY25, the company delivered revenue growth at an 11% CAGR, with 7–8% organic growth, reaching US$516 million in FY25. For FY26, revenues are expected to reach US$600 million, with adjusted EBITDA margins of approximately 19%.
Coforge expects the acquisition to deliver five strategic benefits. First, it significantly strengthens the company’s positioning in AI-led services. Second, it scales Coforge’s HiTech and Healthcare verticals to a combined revenue base exceeding US$170 million. Third, the deal enhances Coforge’s US market presence, particularly across the West and Midwest regions. Fourth, it increases the number of US$10 million-plus client relationships from 34 to 45. Finally, the transaction brings Warburg Pincus and Advent International, Encora’s private equity sponsors, onto Coforge’s board, adding financial and strategic depth to its governance.
The earnings impact of the acquisition will depend materially on execution and synergy realization. Coforge estimates that if Encora achieves a 14% CAGR in FY26–28 and expands EBITDA margins to 21%, the transaction would be EPS neutral. However, in the absence of improvements in growth or profitability, the deal could result in a 7% dilution to FY28 EPS.
Overall, the acquisition represents a bold strategic step for Coforge, materially increasing its scale, deepening its AI capabilities, and reinforcing its exposure to the US market, while also introducing near-term execution and integration risks tied to valuation and margin expansion.