Roper (ROP) Closes Frontline Education Acquisition Deal

Roper Technologies ROP has completed its previously announced acquisition of Frontline Education from Thoma Bravo, a private equity firm. The all-cash transaction was valued at approximately $3.725 billion. Including a tax benefit, the net value of the transaction is around $3.375 billion.

The acquisition adds to Roper’s Horizon software business (which it acquired in 2008), expanding its presence in the K-12 education market. Frontline’s cloud-based software platform provides administrative solutions for K-12 education, including human capital management, business operations management, student management and analytics. The acquisition is expected to contribute approximately $370 million to ROP’s revenues and $175 million to its EBITDA in 2023.

Roper has been successively acquiring businesses to expand its operations. In January 2022, the company acquired American LegalNet, which strengthened its Aderant business to provide comprehensive software solutions to its customers in the legal industry. In 2020, the company made several acquisitions, including Team TSI Corporation, Freight Market Intelligence Consortium, WELIS, Impact Financial Systems, Vertafore and EPSi. Acquisitions/divestitures boosted sales by 1% in the second quarter.

Roper Technologies, Inc. Price

Roper Technologies, Inc. price | Roper Technologies, Inc. Quote

Apart from acquiring businesses, Roper is simultaneously divesting non-profitable/non-core assets to focus on its core areas of growth.  In June 2022, the company entered into a deal with CD&R to sell its Process Technologies segment and industrial units of the Measurement & Analytical Solutions segment. The company expects after-tax proceeds from the transaction to enhance its capital-deployment ability by over 7 billion to acquire lucrative businesses. Subject to customary conditions, the transaction is expected to be completed by 2022-end. In March, the company sold its TransCore business. In fourth-quarter 2021, it completed the divestitures of Zetec and CIVCO Radiotherapy businesses.

Zacks Rank & Key Picks

Roper presently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks within the broader Computers - IT Services industry are as follows:

Nutanix NTNX currently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 63.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

Nutanix has an estimated earnings growth rate of 130.4% for the current year. Shares of the company have rallied 45% in the past three months.

ASGN Incorporated ASGN presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 9.8%, on average.

ASGN has an estimated earnings growth rate of 22.3% for the current year. Shares of the company have gained 2.7% in the past three months.

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