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Roper Technologies (ROP) to Sell Zetec Unit to Eddyfi/NDT

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·3 min read
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  • ROP
  • KAI
  • DOV

Roper Technologies, Inc. ROP recently announced that it has entered into an agreement with Eddyfi/NDT for the divestment of its Zetec business. The deal is valued at about $350 million in cash.

The company’s shares declined 1.2% yesterday to eventually close the trading session at $479.40.

Based in Québec, Canada, Eddyfi/NDT is a private industrial technology group, which focuses on driving innovation and delivering advanced technology solutions for the optimization of infrastructure health. The company, which employs more than 1,300 people globally, has a strong client base in above 110 countries.

Inside the Headlines

Zetec is engaged in providing non-destructive testing equipment and solutions to power generation and other industrial end markets. Zetec generated revenues of about $64 million and EBITDA of $17 million over the past year. It operates under Roper’s Process Technologies segment, which generated revenues of $140.3 million in the second quarter of 2021.

The divestment is in sync with Roper’s strategy of restructuring its business portfolio. The transaction is expected to enable the company to better focus on and efficiently direct resources to its core businesses, thus offering value to its shareholders.

The completion of the transaction, which is expected at the end of 2021, is subject to certain customary conditions.

Zacks Rank, Estimates and Price Performance of Roper

The company, with $50.5-billion market capitalization, currently carries a Zacks Rank #3 (Hold). It is poised to benefit from strength across its across its Deltek, Aderant, CliniSys and Data Innovations businesses along with recovery in education and healthcare end markets. However, rise in debt levels can increase its financial obligations and hurt profitability.

In the past 30 days, earnings estimates for Roper have been improved. The Zacks Consensus Estimate for its earnings is pegged at $15.19 for 2021 and $16.18 for 2022, suggesting growth of 1.3% and 1.1% from the respective 30-day-ago figures.

The company’s shares have gained 11.6% against 1% decline recorded by the industry in the past three months.

Zacks Investment Research
Zacks Investment Research

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Stocks to Consider

Some better-ranked stocks from the same space are Kadant Inc. KAI, Dover Corporation DOV and EnPro Industries, Inc. NPO. While Kadant sports a Zacks Rank #1 (Strong Buy), Dover and EnPro carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kadant delivered an earnings surprise of 22.26%, on average, in the trailing four quarters.

Dover delivered an earnings surprise of 17.59%, on average, in the trailing four quarters.

EnPro delivered an earnings surprise of 80.64%, on average, in the trailing four quarters.

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