Private equity firm Advent International has acquired a controlling stake in Encore, a global digital engineering services company with innovation labs in India and the United States, for $ 1.5 billion.
As part of the deal, Warburg Pincus, Encora’s current majority shareholder, sold its stake and now retains a minority stake.
“We are delighted to enter into this partnership with Advent as we continue to develop our differentiated software engineering service offerings,” said Venu Raghavan, CEO of Encora. “Advent’s deep expertise in the business and technology services industry, along with its global footprint, complements Encora’s strengths and creates opportunities to grow our business in key markets around the world. “
Encora is an established leader in outsourced software product development services, utilizing deep technical expertise in machine learning, AI, data science, cloud services, and other next-generation digital engineering disciplines. to accelerate strategic innovation for technology companies whose market position and growth are driven by proprietary software products.
The deal signifies part of the merger and acquisition activity and demand for companies in the product engineering services space. Earlier this year, Hitachi acquired GlobalLogic in a $ 9.6 billion transaction, one of the largest in engineering, research and development.
The E&RD space has recently become an important center of interest for large players, as engineering is a key element in the history of digital transformation. For the digital segment, this is the engineering of digital products or software, which is the backbone of any digital plumbing and software platform development. For the physical segment, Industry 4.0 is driving transformation in manufacturing and asset-intensive industries. Not having a presence in these industries means an inability to deliver holistic solutions and sell your key customers to other competitors.
Since renaming itself Encora in 2020, the company has increased its focus on the consumer and enterprise technology sectors, and has expanded its global talent pool to more than 6,300 associates in 40 offices. worldwide in Latin America, India, Asia-Pacific and the United States.
“We have experienced tremendous growth in the digital technology services industry over the past few years as the need for strong technology products has grown across all industries,” said Shweta Jalan, Managing Director of Advent.
Jan Janshen, Managing Partner at Advent, also said: “We believe Encora is well positioned to capitalize on the growing digital services market, and we are delighted to partner with Venu, the talented leadership team at Encora and Warburg Pincus to support the company’s growth in key markets in North America, Europe, India, Asia-Pacific and Latin America, where Advent has a strong presence and expertise in the field.
This new partnership enables Encora to accelerate its global growth, both organically and through targeted M&A opportunities, expand its differentiated delivery model and advance its customer-centric digital services. Encora continues to focus on the software and digital engineering needs of SaaS companies, midsize technology companies and large enterprises.
Advent, with $ 81 billion in assets as of June 30, 2021, has invested in more than 380 companies in 42 countries, North America, Europe, Latin America and Asia. She has significant investment experience both in the business and technology services sectors and in the key markets where Encora operates.
JP Morgan acted as exclusive financial advisor to Encora in connection with the transaction and Wilson, Sonsini, Goodrich & Rosati LLP as legal advisor. Credit Suisse acted as financial advisor and Weil, Gotshtal & Manges LLP acted as legal advisor to Advent.