Indian IT services giant Coforge Ltd. has announced the acquisition of US-based AI-native engineering firm Encora Digital LLC for $2.35 billion (approx. ₹21,000 crore). The move marks a major strategic step for Coforge, significantly strengthening its AI, cloud, and data engineering capabilities and expanding its global footprint.
Company Introductions
Coforge Ltd.
Coforge is a leading Indian IT services company headquartered in Noida, India. Established in 1992, Coforge specializes in digital transformation, AI, cloud services, and business process solutions. The company serves clients globally across sectors like banking, insurance, travel, and manufacturing. Coforge has consistently focused on delivering innovative IT solutions to large enterprises and has been expanding its international presence in recent years.
Encora Digital LLC
Encora is a US-based AI-native engineering company providing digital product engineering, cloud, and AI solutions. With a team of over 3,100 engineers spread across North and Latin America, Encora serves Fortune 1000 companies, helping them build, scale, and optimize digital products. Its expertise in AI-led solutions makes it a strategic partner for companies looking to accelerate digital transformation globally.
Deal Overview
- Deal Value: $2.35 billion
- Transaction Type: All-stock transaction – Coforge will issue its shares to Encora’s shareholders.
- Ownership Split: Encora investors, including Advent International and Warburg Pincus, will hold approximately 20% stake in Coforge post-acquisition.
- Funding Plan: Coforge plans to raise around $550 million to repay Encora’s debt and support integration.
Key Benefits and Strategic Importance
1. Expansion in AI-Led Services
Encora’s AI-native solutions in digital product engineering, cloud, and data services will help Coforge expand its AI-led offerings, moving beyond traditional IT services. This positions Coforge as a strong player in the global AI and digital engineering space.
2. Stronger Global Presence
The acquisition significantly increases Coforge’s market share in North America, especially in the West and Midwest regions, leveraging Encora’s established footprint.
3. Access to Talent and Clients
Encora brings 3,100 engineers across the Americas, enhancing Coforge’s near-shore delivery capabilities. Encora’s client portfolio includes 11 clients generating over $10 million annually, and post-merger, the combined entity will serve 45+ major clients, strengthening Coforge’s global client base.
4. Revenue and Profit Potential
The merged entity is expected to achieve ~$2 billion revenue by FY27. EBIT margin is projected to be ~14%, indicating positive earnings growth potential for investors.
Company Statements
Coforge CEO Sudhir Singh stated:
“This acquisition provides a capability moat in AI-led engineering and enables us to serve large clients more effectively. It is a transformative step in building Coforge as a global digital engineering leader.”
The company aims to become one of the top 7 Indian IT companies, surpassing competitors like Persistent, Mphasis, and Hexaware.
Challenges
- Regulatory approvals and shareholder consent could take 4–6 months
- Integration of two companies’ systems and teams may pose operational challenges
Outcome
Coforge’s acquisition of Encora represents the growing global role of Indian IT firms in AI and digital engineering. The merger strengthens Coforge’s technical capabilities, client network, and global presence, particularly in North and Latin America.
This strategic move indicates that Indian IT companies are no longer limited to traditional software services but are emerging as global competitors in AI-led digital solutions.
Source: coforge encora news
