Coforge has entered into a definitive agreement to acquire Encora in an all-stock transaction valued at $2.35 billion. The firm characterized the acquisition as a “defining moment” as it seeks to enhance its capabilities in AI-led engineering, data, and cloud services.
During a conference call with analysts, Coforge’s chief executive officer, Sudhir Singh, emphasized that this transaction aims to establish a scaled, AI-native engineering capability at a critical juncture when enterprise technology is increasingly influenced by advances in artificial intelligence, cloud computing, and data analytics.
Singh noted that under the current leadership team, which has been in place for about eight and a half years, Coforge has achieved one of the highest growth rates among mid- and large-cap technology services firms. This growth has been driven by a focus on execution, hyper-specialization in select industries, and deep expertise in emerging technologies. The company’s revenue run rate has increased nearly fivefold during this period, while its market capitalization has grown almost twentyfold, according to Singh.
The acquisition of Encora is intended to build upon Coforge’s strong track record. Singh stated that the firm aims to evolve into an approximately $2.5 billion technology services company, with a core enterprise segment focused on AI-led engineering, data, and cloud services projected to reach $2 billion.
Founded in Silicon Valley, Encora specializes in providing AI-native software engineering services to both digital-native firms and Fortune 1000 enterprises. Its offerings include intelligent process design, agent-native product engineering, core modernization, AI foundations, data readiness, and AI operations.
Singh highlighted Encora’s composable AI platform, AIVA, which facilitates agentic orchestration and enables organizations to design intelligent workflows that span both engineering and business functions. He delineated five attributes that distinguish Encora: an AI-native internal agentic platform, long-standing relationships within large enterprises, a human-plus-agent delivery model, a talent composition aligned with AI-native engineering rather than labor arbitrage, and a services-plus-software platform model.
According to Singh, the acquisition is projected to create substantial scale across service lines by fiscal year 2027. AI-led product engineering is expected to become a $1.25 billion business, while cloud services may generate $500 million, and data engineering is anticipated to contribute about $250 million in revenue.
In terms of industry verticals, Singh mentioned that the deal will significantly enhance Coforge’s presence in the high-tech and healthcare sectors, with both expected to achieve a run rate of $170 million post-acquisition. Encora brings to the table AI-led healthcare solutions, including biomedical research assistants, AI-enabled patient monitoring, multi-omics data ingestion, and foundational AI frameworks for clinical trials.
The acquisition will also strengthen Coforge’s near-shore delivery capabilities in Latin America, where Encora has over 3,100 delivery professionals, and will notably expand the company’s footprint in the western and midwestern regions of the United States. Singh projected that Coforge’s North America business would grow by approximately 50% to $1.4 billion following the transaction.
Coforge will gain 45 client relationships, each generating more than $10 million in annual revenue, following the deal. Encora contributes 11 such relationships, with its top ten client accounts averaging over a decade in tenure. Singh pointed out Coforge’s history of successfully expanding acquired client relationships, referencing the earlier acquisition of Cigniti.
Providing details about the financials, chief financial officer Saurabh Goyal stated that Coforge will acquire 100% of Encora from Advent International, Warburg Pincus, and other minority shareholders. The enterprise value of the transaction stands at $2.35 billion, which includes an equity consideration of $1.89 billion to be settled through a preferential allotment of Coforge shares. The company’s board has approved raising the remaining amount via a qualified institutional placement.
Encora is expected to generate about $600 million in revenues for fiscal year 2026, with an adjusted EBITDA margin projected at around 19%, Goyal added. In a statement, Shweta Jalan, managing partner at Advent International, remarked that the investment reflects Advent’s strategy of supporting businesses and management teams to create industry-leading companies, underscoring the significant implications of this acquisition for Coforge’s future.
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