Coforge to buy AI firm Encora for $2.35 billion

All-stock deal marks the biggest acquisition by an Indian IT firm in ER&D space

- SHIVANI SHINDE

Midcap information technology (IT) services company Coforge will acquire Silicon Valley-based artificial intelligence (AI) firm Encora for $2.35 billion in an all-stock deal — the largest takeover by an Indian IT company in the engineering research and development (ER&D) segment.

The transaction is the fourth-largest ER&D deal globally and the second-largest acquisition by an Indian IT services company ever. It is expected to significantly strengthen Coforge's artificial intelligence capabilities while expanding its geographic footprint.

The Noida-headquartered company will acquire the business from Advent, Warburg Pincus and other minority shareholders. Coforge will fund the $1.89 billion equity value of the deal through the issue of a preferential allotment of shares at ₹1,815.91 apiece, a 14.5 per cent premium to Friday's close. Encora’s current shareholders will receive a 20 per cent stake in the combined firm.