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Tuesday, Roper Technologies (NASDAQ:ROP), currently trading near its 52-week high at $579.07 with a market capitalization of $62.19 billion, announced the acquisition of CentralReach, a software provider specializing in autism and IDD care, for a net purchase price of $1.65 billion. The deal includes a $200 million tax benefit. Truist Securities analyst Terry Tillman has reiterated a Buy rating on Roper Industries stock with a price target of $675.00, reflecting confidence in the company’s latest strategic move. According to InvestingPro data, Roper maintains a GOOD financial health score, suggesting strong fundamentals to support this strategic acquisition.
CentralReach is projected to add approximately $175 million in revenue and around $75 million in EBITDA for the twelve months ending June 30, 2026. This acquisition will be integrated into Roper’s Application Software (ETR:SOWGn) segment. Despite the acquisition multiples being higher than Roper’s historical median, with an implied revenue multiple of about 9.4x and EBITDA multiple of approximately 22x, Truist Securities believes the premium is justified due to CentralReach’s high-growth profile. This aligns with Roper’s current growth trajectory, as InvestingPro data shows the company achieved impressive revenue growth of ~14% in the last twelve months, with a P/E ratio of 39.9x reflecting investors’ growth expectations.
Roper’s historical transactions have shown a median enterprise value to sales (EV/Sales) multiple of roughly 6.8x and enterprise value to EBITDA (EV/EBITDA) multiple of about 14.7x over the past decade, not including the CentralReach deal. The acquisition’s higher valuation multiples stand out against this backdrop, signaling the company’s willingness to invest in businesses that offer substantial growth potential.
The analyst from Truist Securities views the acquisition as a significant step for Roper, aligning with its strategy of acquiring mature market leaders that can contribute to the company’s long-term organic growth. The purchase of CentralReach is expected to bolster Roper’s position in the healthcare software market, specifically catering to the needs of autism and IDD care providers.
Roper Technologies’ decision to acquire CentralReach at a premium reflects its commitment to expanding its software solutions within the healthcare sector and its confidence in CentralReach’s growth trajectory. This strategic move is anticipated to enhance Roper’s overall growth and strengthen its software portfolio. Analyst targets range from $540 to $741, with a consensus suggesting an 11% upside potential from current levels. For deeper insights into Roper’s valuation and growth metrics, investors can access comprehensive analysis through the Pro Research Report, available exclusively on InvestingPro, along with 14 additional key ProTips about the company’s performance and outlook.
In other recent news, Roper Technologies has announced a definitive agreement to acquire CentralReach for approximately $1.65 billion, including a $200 million tax benefit. This acquisition is expected to contribute around $175 million in revenue and $75 million in EBITDA by mid-2026, with expectations of sustainable organic growth. Additionally, Roper Industries maintained its Buy rating from TD Cowen with a $650 price target, reflecting confidence in the company’s strategic acquisitions and potential earnings growth. The analysts foresee a possible increase in earnings per share by 2027, supported by effective debt management.
Roper Technologies also declared a dividend of $0.825 per share, to be paid in April 2025, emphasizing its commitment to shareholder value. PowerPlan, a subsidiary of Roper, introduced a new SaaS platform, PowerPlan NXT, aimed at enhancing financial asset management for asset-intensive organizations. The platform integrates AI-driven features to improve financial outcomes and will be available in modules starting in 2026. Meanwhile, Procare Solutions, another Roper subsidiary, launched Procare Professional Development, a training platform for early childhood education providers, offering accredited courses and certifications. These developments highlight Roper’s ongoing efforts to expand its market presence and enhance its service offerings.
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