Coforge to acquire Encora for $2.35 bn

· Acquisition to aid mid-tier IT firm's push into AI-led engineering

- URVI MALVANIA

COFORGE ON FRIDAY said that it has agreed to acquire US-based digital engineering firm Encora inan all-stocktransaction valued at an enterprise value of $2.35 billion (around ₹21,140 crore), marking one of the largest overseas acquisitions by an Indian mid-tier IT services company and signalling a sharper strategic shift towardsAI-led engineering, data and cloud services.

The deal pegs Encora's equity value at about $1.89 billion (around ₹17,000 crore) and will see Coforge acquire 100% of the company from private equity investors Advent International, Warburg Pincus and other minority shareholders. The balance between the equity value and enterprise value,amounting to up to $550 million (around ₹4,100 crore), will be used to retire Encora's existing term loan.

Coforge said the transaction will be executed entirely through a share swap, with no cash consideration being paid to the selling shareholders. As part of the acquisition, Coforge will issue about 93.8 million equity shares at an issue price of₹1,815.91 per share, implying a premium of about 8.5% to the company's closing price on Friday. Posttransaction, Encora's shareholders will collectively hold about 20-21% of Coforge's expanded equity capital.