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Roper Technologies (ROP) Set to Acquire PowerPlan for $1.1B

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Roper Technologies ROP recently announced that it has entered into a definitive agreement to acquire PowerPlan — a major provider of software and solutions from private equity firm, Thoma Bravo. This $1.1 billion all-cash deal is expected to close in the second quarter.

PowerPlan is a provider of software solutions for asset-centric businesses. This Atlanta, GA-based company’s well-recognized software platform, which integrates detailed financial and operational data, helps in the optimization of customers’ financial performance and reduces compliance risk.

Existing Business Scenario

Roper holds a dominant position in most markets where it operates. Additionally, the company has an optimum mix of highly engineered, niche-oriented products that helps it to gain market share. Although Roper operates in a cyclical business environment, its diversified revenue stream has helped the company to counter the headwinds. We believe that Roper’s innovative product pipeline will be a major catalyst over the long term.

Moreover, the company’s unique asset-light business model allows it to remain less dependent on large-scale production equipment. This enables the company to remain profitable even when sales decline during recession. Notably, this Zacks Rank #2 (Buy) company has gained 7.9% in the past six months, outperforming the industry’s increase of 0.5%.

Roper’s ardent eye for acquisitions is anticipated to strengthen its business and gain market share. In this regard, the ConstructConnect and the Deltek buyouts are worth mentioning as these acquisitions have reinforced the company’s software and network businesses. We believe that the successful integration of the acquisitions should supplement Roper’s top-line performance, moving ahead.

Other Stocks to Consider

Some other top-ranked stocks from the same space are Graco Inc. GGG, IDEX Corp. IEX and Nordson Corp. NDSN. While Graco sports a Zacks Rank #1 (Strong Buy), IDEX and Nordson carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Graco surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 12.8%.

IDEX outpaced estimates in the preceding four quarters, with an average positive earnings surprise of 3.1%.

Nordson exceeded estimates thrice in the trailing four quarters, with an average positive earnings surprise of 3.9%.

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