Board OKs major acquisition, creating a larger player in AI and cloud
Coforge’s board has approved the acquisition of Encora in a deal valued at $2.35 billion. As part of the transaction, Coforge will issue 93.8 million shares. The combined company is expected to operate as a roughly $2.5 billion entity with a clear focus on artificial intelligence, cloud and data services.
Key deal facts at a glance
- Acquisition price: $2.35 billion
- Shares issued: 93.8 million
- Estimated combined entity value: $2.5 billion
- Revenue target: $2 billion by FY27
Why the transaction matters
The move brings together two technology-focused companies to build scale in fast-growing areas such as AI, cloud computing and data services. By pooling resources, talent and client relationships, the combined firm aims to expand its service portfolio and compete more effectively for larger, more complex deals.
For clients, this consolidation could mean broader end-to-end capabilities — from strategy and engineering to managed services — delivered at greater global scale. For employees, it may open up new career and skill-building opportunities in emerging technologies.
Financial and strategic implications
The issuance of nearly 94 million shares indicates significant equity consideration in the transaction. This kind of share-based deal can help preserve cash while aligning incentives across the combined business, though it may also dilute existing ownership depending on the final share mix and any subsequent financing steps.
Setting a revenue goal of $2 billion by fiscal year 2027 signals an aggressive growth ambition. Achieving that target will likely depend on successful integration, upselling to existing clients, cross-selling between the two customer bases, and winning new accounts driven by AI and cloud demand.
Potential synergies
- Expanded client reach across industries and geographies
- Broader technology offerings in AI, cloud migration, analytics and data engineering
- Operational efficiencies from shared platforms and back-office functions
- Stronger scale for large enterprise and cloud-native deal execution
Key items to monitor as the deal progresses include integration planning, cultural alignment, retention of key talent, and realization of projected cost and revenue synergies. The transaction’s final impact on earnings per share, cash flow and balance-sheet leverage will also be important to investors.
Regulatory and shareholder approvals are typically required in transactions of this size, and timelines can vary. Market reaction will depend on how clearly management communicates the integration roadmap and how quickly early benefits become visible.
Outlook and next steps
If the companies meet the stated targets, the combined entity would emerge as a more diversified and competitive player in AI, cloud and data services. The journey to a $2 billion revenue run rate by FY27 will test execution capabilities, but it also reflects confidence in demand for digital transformation services.
Over the coming months, expect further announcements about governance, leadership structure, integration milestones and any regulatory milestones. Investors, clients and employees will be looking for concrete signs that the merger is creating value beyond the headline numbers.
The deal marks a significant consolidation in the tech services space, driven by the need for scale and stronger capabilities in AI, cloud and data-driven work.