Coforge (COFORGE) investor relations material

Strategic rationale and growth outlook

• Acquisition creates a $2.5 billion tech services powerhouse with a $2 billion AI-led core, targeting accelerated growth and value creation for digital-native and Fortune 1000 clients.

• Expands high-tech and healthcare verticals to $170 million each, with immediate scaling and new AI-led healthcare solutions.

• Enhances global delivery with over 44,000 employees, strengthens nearshore LATAM delivery with 3,100+ engineers, and boosts North America revenue by 50% to $1.4 billion.

• The combined firm will have 45 clients with $10 million+ relationships and a proven track record of cross-selling and upselling.

• Unique distributed delivery model accelerates engineering velocity and client proximity.

Financial terms and conditions

• The $2.35 billion enterprise value deal is structured as an all-stock transaction, with sellers receiving 93.8 million shares at INR 1,815.91 per share, reflecting an 8.5% premium to the signing date price.

• Encora shareholders will hold approximately 20%-21% of the combined company on a fully diluted basis, assuming the Cigniti merger proceeds.

• Funding includes $1.89 billion in equity shares and a potential $550 million bridge or term loan (or QIP) to retire Encora’s existing debt; QIP is one of several options and may not be triggered.

• Encora’s FY26 estimated revenue is $600 million with a 19% adjusted EBITDA margin; the combined business is expected to operate at a 14% EBIT margin post-amortization and be EPS accretive.

• Cost synergies of $20 million are assumed, driving a ~90 bps increase in combined EBITDA margin, with tax benefits from amortization in the US estimated at $4 million for FY27.

Synergies, integration, and leadership

• Significant revenue synergies are anticipated from cross-selling broader service lines, especially leveraging Encora’s AI-led engineering.

• Cost synergies are expected from G&A, S&M, and operational efficiencies, with only modest margin improvement assumed due to Encora’s strong profile.

• Leadership retention will follow a proven playbook, with retention structures including stocks and bonuses; specifics to be finalized post-regulatory approvals.

• Two Advent representatives will join the Board, bringing expertise and potential access to Advent’s portfolio companies.

• No performance-linked consideration or special lock-ins beyond statutory requirements for incoming shareholders; client concentration and revenue per employee metrics are healthy and diversified.