Coforge to Acquire US-Based Encora in $1.89 Billion Deal; Analysts See Strong Growth Upside
IT services firm Coforge has announced the acquisition of Encora, a US-based engineering and AI-led services company with annual revenue of around $500 million. According to stock market analysts, the transaction could add 26–30% to Coforge’s estimated FY26 revenue base, significantly strengthening its growth trajectory.
While clarity on the integration strategy is still evolving, analysts believe Coforge’s track record with past acquisitions offers comfort. Motilal Oswal Financial Services (MOFSL) pointed out that earlier buys such as SLK Global and Cigniti accounted for 9–14% and 16% of Coforge’s revenue, respectively, at the time of acquisition.
However, MOFSL noted that unlike previous, largely client-led acquisitions, the Encora deal is more capability- and leadership-driven, making talent retention and execution discipline crucial given the scale of the transaction.
Higher margins, strong vertical fit
Encora employs around 9,300 professionals, translating into revenue per employee of $74,000, compared with $69,000 for Coforge. The firm also operates at higher margins, which could support profitability post-integration.
“The vertical mix, primarily Hi-Tech and Healthcare, is a positive, especially given Coforge’s strategic focus on scaling these segments. Management has indicated that the transaction could be EPS accretive from day one,” MOFSL said.
Deal structure and funding
The acquisition will be executed through a $1.89 billion share swap, alongside a QIP or bridge loan to retire Coforge’s $550 million term loan. Upon completion, Encora shareholders will hold about 21% of the combined entity.
Brokerage firm Nuvama said the deal would create an AI-native engineering, cloud, and data services powerhouse, while also expanding Coforge’s geographic footprint. The transaction is expected to close within four to six months, subject to regulatory approvals.
“With nearly $600 million in revenue, representing about 30% of Coforge’s size, Encora is the company’s biggest and boldest acquisition to date. We like the transaction structure and believe Encora will further accelerate Coforge’s growth,” Nuvama said, while maintaining a ‘BUY’ rating. The brokerage added that Encora’s financials have not yet been factored into its estimates.
Nuvama also highlighted that the QIP option will be evaluated closer to deal closure, and there is a possibility that it may not be required.
Strategic expansion in the US
Centrum Broking said the Encora acquisition would provide Coforge with much-needed scale, while enabling entry into new verticals and geographies, particularly in the US market.
“The Encora acquisition will further drive and diversify Coforge’s growth, which has already been industry-leading on an organic basis. The share-swap structure reflects the confidence of private equity investors in Coforge’s long-term business model,” Nuvama added.
