Advant International, a private equity (PE) firm, has purchased a controlling position in Encora, a worldwide digital engineering services company with innovation laboratories in India and the United States, for $1.5 billion.As part of the arrangement, Warburg Pincus, Encora's current majority shareholder, surrendered its interest and currently has a minority position.
"We are excited to join into this cooperation with Advent as we continue to grow our distinctive software engineering service offerings," stated Encora CEO Venu Raghavan.
"Advent's substantial business and technology services sector knowledge, as well as its worldwide reach, complements Encora's capabilities and offers opportunity to build our business in important areas throughout the world," he continued.
Encora is a well-known provider of outsourced software product development services, leveraging deep technical expertise in machine learning, artificial intelligence (AI), data science, cloud services, and other next-generation digital engineering disciplines to accelerate strategic innovation for technology-enabled businesses.
The transaction represents part of the mergers and acquisitions (M&A) activity and demand for product engineering services firms. Hitachi
purchased GlobalLogic earlier this year in a $9.6 billion deal, one of the largest in the engineering and research and development (R&D) market.
As engineering is a vital component in the digital transformation storey, the engineering and R&D arena has recently been a significant priority for large companies.Digital or software product engineering is the backbone of all software platform development and digital plumbing in the digital segment.
Industry 4.0 is driving revolution in manufacturing and asset-intensive businesses in the physical segment.If you are not present in these areas, you will be unable to deliver a complete service and will lose your core clients to rivals.
Since rebranding as Encora in 2020, the company's focus has shifted to the consumer and enterprise technology industries.Its worldwide talent pool has expanded to over 6,300 employees spread over 40 global locations in Latin America, India, Asia-Pacific, and the United States.
"Over the last five years, we have witnessed enormous growth in the digital technology services industry."This is due to the rise of powerful technological goods across industries," said Shweta Jalan, managing director (MD) at Advent.
"We believe Encora is well positioned to capitalise on the increasing digital services sector," said Janshen, managing partner at Advent. We are thrilled to be working with Venu, Encora's outstanding management team, and Warburg Pincus to help the firm develop in major countries such as North America, Europe, India, and Asia Pacific, where Advent has a strong presence."Encora will be able to accelerate its worldwide expansion through both organic and targeted M&A prospects as a result of this new alliance.
This also aids in the expansion of its distinct delivery strategy and the advancement of its customer-facing digital services.
Encora continues to focus on supporting the software and digital engineering needs of SaaS firms, mid-market technology companies, and major organisations. Advent, which has assets of $81 billion as of June 30, 2021, had invested in over 380 firms in 42 countries throughout North America, Europe, Latin America, and Asia.