Coforge, a midcap IT services company, will purchase Encora, a Silicon Valley AI firm, for $2.35 billion in an all-stock transaction — marking the largest acquisition by an Indian IT firm in the ER&D sector.

This transaction ranks as the fourth-largest ER&D deal worldwide and is the second-largest acquisition ever made by an Indian IT services firm. It is anticipated to greatly enhance Coforge’s artificial intelligence abilities while broadening its geographical presence.

The company based in Noida will obtain the business from Advent, Warburg Pincus, and various minority investors. Coforge will finance the $1.89 billion equity value of the transaction by issuing a preferential allotment of shares at Rs.1,815.91 each, reflecting a 14.5 percent premium over Friday's closing price. Encora's existing shareholders will obtain a 20 percent share in the merged company.

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The investors will be entitled to designate two nominee directors to Coforge’s board, as well as representation on important board committees. The merged entity is anticipated to function with an EBIT (earnings before interest and taxes) margin of 14 percent, and the acquisition is expected to enhance earnings per share in 2026-27.

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Encora, with its expertise in AI-powered engineering bolstered by cloud and data resources, expects to achieve revenue of $600 million for FY26 and an adjusted EBITDA margin of approximately 19 percent.
The deal is contingent upon standard closing conditions and regulatory authorizations.

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“The Encora acquisition is a defining moment for our organization. It establishes a scaled, AI-led engineering capability moat for the firm, underpinned by capabilities that help create enterprise data cores and cloud foundations purpose-built for AI. The new $2.5 billion firm, with a $2 billion enterprise core of AI-led engineering, data and cloud services, will set the benchmark for making the promise of AI real for enterprises,” says Sudhir Singh, chief executive officer and executive director of Coforge.