Coforge said on Thursday it has completed the acquisition of US-based engineering services firm Encora, a deal it announced in December, and has called off plans to raise fresh equity after arranging a USD 550 million loan to fund the purchase.
As part of the transaction, Coforge allotted shares to Encora’s sellers on a preferential basis at Rs 1,815.91 per share, in line with the terms agreed at the time of signing, the company said in a statement.
The IT services firm said it would not proceed with a qualified institutional placement (QIP) as it has secured a three-year, USD 550 million loan at a fixed interest rate of 4.6 per cent. The loan requires the first repayment six months from now, the company added.
Coforge said Encora’s financials will be consolidated into its accounts from 1 May 2026, meaning the company’s fiscal year 2027 results will reflect 11 months of contribution from the acquired business.
The company said integration planning had been under way for the past four months and that the reporting structure of the combined organisation has now taken effect. It expects the deal to have a “significant positive impact” on growth and margins in fiscal 2027, with general and administrative cost synergies estimated at 20 per cent to 25 per cent.
Coforge also said all key Encora leaders it aimed to retain have taken up roles in the integrated organisation. Vijay Verma, one of Encora’s business leaders, has been designated as a senior management personnel of Coforge.
The acquisition is expected to strengthen Coforge’s presence in high-growth areas such as AI-led engineering, data and cloud services, expand its nearshore delivery capabilities in Latin America, and deepen its client footprint in the western and midwestern United States. The combined entity will have 45 client relationships generating more than USD 10 million each in annual revenue, the company said.
Coforge said the enlarged group would have annual revenue of about USD 2.5 billion, positioning it to benefit from rising enterprise spending on artificial intelligence-led digital transformation in the coming years. |
