IT services company Coforge has obtained approval from the Reserve Bank of India (RBI) for an overseas direct investment (ODI) exceeding $1 billion to finalize its $2.35 billion acquisition of US-based AI solutions provider Encora. The combined entity is projected to reach $2 billion in revenue by 2027, operate at a 14% margin, and become earnings per share (EPS) accretive.
Coforge’s acquisition of Encora, supported by Advent International and Warburg Pincus, aims to enhance its offerings in AI solutions spanning product, cloud, and data engineering domains. The deal structure involves financing the $1.89 billion equity portion through preference shares issuance at Rs 1,815.91 each, while Encora shareholders will hold a 20% stake in the merged entity.
To clear Encora’s debt, Coforge plans to raise up to $550 million through a bridge loan or a qualified institutional placement of its shares. The revenue figures from fiscal year 2025 indicate significant growth potential for the combined businesses, with Coforge reporting $1.34 billion and Encora recording $516 million in turnover.
Source: Tech-Economic Times