Roper Industries Inc.
) has agreed to a buy Managed Health Care Associates, Inc.
("MHA") for an all-cash deal of $1 billion. The company expects
to close the acquisition in the next 30 days, subject to the
required regulatory approvals.
Managed Health Care Associates, based in Florham Park, N.J,
provides healthcare services and solutions like Group Purchasing,
Managed Care and Payer Contracting, Pharmaceutical Data Analytics
and Clinical Services. MHA's services and software enhances
business growth through operational efficiency for its
Roper projects that the current acquisition will generate
approximately $95.0 million in EBITDA for the first 12 months.
This excludes acquisition-related fair value accounting. The
recent acquisitions reflect Roper's focus on expanding its
high-margin businesses. Given MHA's significant growth
opportunities, recurring revenue stream and strong cash flow
generation, we believe that the acquisition will be accretive for
Roper over the long term.
Acquisitions have been an integral part of Roper's growth
story and had resulted in incremental revenues. Roper's last
acquisition in the medical segment was Sunquest Information
Systems Inc. for $1.4 billion in mid-2012. Roper's revenues from
Medical & Scientific Imaging segment had increased 15.3% year
over year in fiscal 2012 while its orders increased 14.7% in
We believe that strong backlog coupled with robust organic
growth will drive earnings growth going forward. Moreover,
accretive acquisitions will expand its product portfolio,
providing a significant competitive edge over its peers.
However, macroeconomic concerns, integration issues due to
acquisitions and competition from
Agilent Technologies Inc.
) are possible headwinds for the company.
Currently, Roper has a Zacks Rank #2 (Buy).
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