Diversified technology company Roper Technologies, Inc. (ROP) has entered into an all-cash deal worth $2.68 billion to divest its TransCore business to Singapore Technologies Engineering Ltd, a global technology, defense and engineering group.
The deal, which is subject to customary closing conditions and regulatory approvals, is expected to close in the first quarter of 2022.
As per the agreed terms, Roper will keep its DAT and Loadlink network software businesses, which it acquired together with TransCore in 2004. Also, it retained Evercore and BofA Securities as financial advisors in connection with this transaction.
Further, the company seeks to use the after-tax proceeds from this divestiture to accelerate and amplify its ability to deploy capital toward its pipeline of high-quality acquisition opportunities. (See Roper stock chart on TipRanks)
The President and CEO of Roper, Neil Hunn, said, “ST Engineering will be a great owner for TransCore and will support the business as it pursues the next phase of its innovative work in traffic management, tolling technology, and smart city infrastructure.”
“The divestiture of the project-oriented TransCore business will enhance our mix of predictable, high-margin, recurring revenue businesses and notably reduce our working capital requirements,” Hunn added.
Following the news, Raymond James analyst Brian Gesuale maintained a Buy rating on Roper with a price target of $550 (22.9% upside potential).
The stock has a Moderate Buy consensus rating based on 7 Buys, 1 Hold and 1 Sell. The average Roper price target of $522.33 implies 16.7% upside potential from current levels. Shares have gained 11.6% over the past year.
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