Coforge to buy US-based firm Encora for $2.35B to sharpen AI focus

Tech service provider Coforge on Friday said that it has signed a definitive agreement to acquire Encora, a United States-based firm that provides artificial intelligence (AI)-driven engineering services.

Coforge will buy Encora from private equity investors Advent International and Warburg Pincus in a transaction valued at $2.35 billion, the Noida-headquartered firm said in a BSE filing. The transaction is subject to customary closing conditions and regulatory approvals, it added.

For Coforge, the acquisition significantly accelerates its pivot towards AI-centric growth. The company said AI-led engineering, data and cloud services together are expected to generate about $2 billion in revenue by FY27, out of the combined entity’s projected $2.5-billion topline. Within this, AI-led product engineering is expected to scale into a $1.25-billion-plus business, cloud services to around $500 million and data engineering to more than $250 million.

Encora is an AI-native engineering services firm serving Fortune 1000 enterprises and digital-native companies. It operates at the intersection of artificial intelligence, cloud and data, with capabilities spanning agent-native product engineering, core modernisation, AI foundations, data readiness and AIOps. The company has also built one of the industry’s early composable agentic AI platforms, AIVA, and counts AWS, Microsoft, Google and Snowflake among its key partners.

Encora reported estimated FY26 revenue of $600 million, with an adjusted Ebitda margin of about 19%. Post-acquisition, the combined business is expected to operate at an Ebit margin of 14%, with the deal likely to be earnings-per-share accretive in FY27, Coforge said.

The acquisition will also reshape Coforge’s geographic and vertical mix. Hi-tech and healthcare are expected to immediately reach material scale, each operating at an annualised revenue run rate of more than $170 million. The deal gives Coforge a significantly expanded near-shore delivery presence in Latin America, with over 3,100 engineering and AI specialists serving US clients. It will also deepen Coforge’s footprint in the western and midwestern US, regions that contributed only 25% of its US revenues prior to the acquisition. The combined firm will have 45 client relationships generating over $10 million each.

Under the deal structure, Coforge will fund the acquisition primarily through a preferential allotment of equity shares valued at about $1.89 billion. Encora shareholders will hold around 20% of Coforge’s expanded share capital after completion, the filing said.

Calling the deal “a defining moment”, Coforge CEO and executive director Sudhir Singh said the acquisition creates a scaled AI-led engineering “moat” underpinned by enterprise data and cloud foundations built for AI. “The new $2.5-billion firm will set the benchmark on making the promise of AI real for enterprises,” he said.

Shweta Jalan, managing partner at Advent, said the transaction reflects Advent’s approach of building category-leading businesses and expressed confidence in Coforge’s ability to scale Encora further.

BDA Partners acted as exclusive investment banker to the transaction, while JSA and Khaitan & Co. advised Coforge and Encora, respectively.