Coforge Approves $2.35B Acquisition of Encora in Share Swap Deal
Filing Summary
Coforge Ltd has approved a strategic acquisition of Encora US Holdco, Inc. and Encora Holdings Ltd. (Cayman) for an enterprise value of USD 2.35 billion. The transaction involves a share swap arrangement, issuing 9,37,96,508 equity shares at INR 1,815.91 each, aggregating to INR 1,70,32,60,16,842. The acquisition aims to enhance Coforge’s capabilities in AI-led engineering services. The deal is subject to regulatory approvals and is expected to close within 4 to 6 months. Coforge will also increase its authorized share capital to facilitate this transaction.
Coforge Ltd has announced the approval of a strategic acquisition of Encora US Holdco, Inc. and Encora Holdings Ltd. (Cayman). The acquisition is structured as a share swap, involving the issuance of 9,37,96,508 fully paid-up equity shares of Coforge at a price of INR 1,815.91 per share. This transaction is valued at an enterprise value of USD 2.35 billion, equivalent to INR 1,70,32,60,16,842. The acquisition is intended to strengthen Coforge’s position in AI-led engineering services.
The financial terms of the acquisition include the issuance of equity shares at a premium, with each share having a face value of INR 2. The total consideration for the share swap amounts to INR 1,70,32,60,16,842. Coforge will increase its authorized share capital from INR 77 crore to INR 102 crore to accommodate the issuance of additional shares. The transaction also involves a bridge loan or qualified institutional placement (QIP) of up to USD 550 million to retire Encora’s existing term loan.
Operationally, the acquisition will enable Coforge to enhance its capabilities in AI-led engineering, cloud, and data services. Encora’s expertise in these areas, combined with Coforge’s industry specialization, is expected to create a robust service offering. The acquisition will also expand Coforge’s presence in the HiTech and Healthcare verticals, leveraging Encora’s existing client relationships and delivery capabilities in the US and LATAM regions.
The timeline for the acquisition is set for completion within 4 to 6 months, subject to regulatory approvals and satisfaction of customary conditions. Key regulatory approvals required include those from the Reserve Bank of India and antitrust authorities in the US, Australia, Romania, and Spain. The transaction is expected to close following the receipt of these approvals and the completion of necessary shareholder actions.
The parties involved in the transaction include Coforge Ltd, Encora US Holdco, Inc., Encora Holdings Ltd. (Cayman), Encora Holdco Ltd. (UK), and AI Altius Parent (Cayman) Limited. The investors, Encora Holdco Ltd. and AI Altius Parent, will receive the newly issued Coforge shares as part of the share swap arrangement. The transaction does not involve any related party transactions, and there will be no change in control over Coforge.
The acquisition aligns with Coforge’s strategic focus on expanding its capabilities in AI and cloud services. Encora’s AI-native platform and expertise in intelligent process design and agent-native product engineering complement Coforge’s existing offerings. This acquisition is expected to enhance Coforge’s competitive position in the technology services market, particularly in the US and LATAM regions.
About Coforge Ltd: Coforge Ltd is a global digital services and solutions provider, specializing in transforming businesses through technology. The company focuses on delivering innovative solutions in areas such as AI, cloud, and data services, with a strong emphasis on industry-specific expertise and execution intensity.