As the battle for AI and digital engineering intensifies, Indian IT services firm Coforge is making its biggest move yet. The company has agreed to acquire US-based Encora in a $2.35 billion all-stock deal. This transaction is expected to expand Coforge’s capabilities in AI-led product engineering, cloud, and data services, while deepening its presence in North America, the world’s largest enterprise tech market. Meanwhile, the deal remains subject to regulatory and shareholder approvals and is expected to close within the next four to six months.
The transaction will be executed entirely through a share swap, with Coforge issuing new equity worth around $1.89 billion to Encora’s shareholders. Following completion, Encora’s investors (led by private equity firms Advent International and Warburg Pincus) are expected to own about 20-21% of the combined entity. There is no cash consideration involved, clearly showing Coforge’s strategy of preserving liquidity while aligning long-term incentives through equity ownership.
Along with the acquisition, Coforge’s board has approved plans to raise up to $550 million through a qualified institutional placement (QIP) or other permitted routes. While the deal itself is all-stock, the fundraise is intended to strengthen the balance sheet, support integration costs, and provide flexibility for future investments as the company scales up operations in new technology areas.
Post-acquisition, the combined company is expected to generate around $2.5 billion in annual revenue, pushing Coforge into a higher league among global IT services providers. Management expects AI-driven digital engineering to become the largest growth engine, with this segment alone projected to contribute more than $1.25 billion in revenue over the medium term. Cloud modernization, data platforms, and analytics services are also expected to see accelerated growth as enterprises modernize legacy systems and build AI-ready architectures.
Encora brings with it strong credentials in product engineering, AI-native development, cloud transformation, and data engineering. The US-based firm is projected to post about $600 million in revenue in the coming financial year and operates with EBITDA margins close to 19%. Encora’s client base is heavily concentrated in North America, particularly among technology, healthcare, and digital-native companies, which complements Coforge’s existing portfolio.
The development comes at a time when the Indian IT services sector is facing a challenging growth environment, with companies dealing with slower revenue expansion, cautious enterprise spending, and shifting client priorities amid broader macroeconomic uncertainty. Global clients, particularly in North America and Europe, have been cutting back on non-essential technology budgets, delaying large transformation projects, and prioritising cost optimisation over large-scale digital initiatives.
The Tech Portal is published by Blue Box Media Private Limited. Our investors have no influence over our reporting. Read our full Ownership and Funding Disclosure →
