Tim Mueller’s Transaction Analysis: New IT M&A Deals May 22

Roper Technologies To Acquire PowerPlan for $1.1B

Financial Information*

  • Transaction Value $1.1B
  • EV/LTM Revenue N/A
  • EV/LTM EBITDA N/A

Transaction Facts

  • Roper Technologies (NYSE: ROP) announced yesterday its agreement to acquire financial software company PowerPlan from private equity firm Thoma Bravo in an all-cash deal valued at $1.1B.
  • According to the press release, the deal will add ~$150M in revenue and $60M in after-tax cash flow to Roper in the first year of ownership. PowerPlan’s name and brands are not expected to change as a result of the transaction.
  • The transaction is expected to close in the second quarter of this year.

Expanding Presence in the Software Industry

  • Billion-Dollar Deals: This deal marks Roper’s second big software purchase. The Sarasota, Florida-based company bought business software firm Deltek, also from Thoma Bravo, for $2.8B in December 2016. Roper, producing $4.6B in revenue in 2017, has been looking to expand its presence in the software space, as its growth from higher-margin product categories have remained consistently strong.
  • Proud Parent: Thoma Bravo is one of the most active PE firms in the software industry. Since the firm added software and technology to its investment focus, it has completed 54 acquisitions in the space (23 platform companies and 31 add-ons) with an aggregate value exceeding $7.5B. The firm has a knack for acquiring vertical market software companies and building scale. In the case of PowerPlan, the company has been able to expand its business beyond the US and Canada into new adjacent markets after Thoma Bravo bought it in 2015.
  • Global M&A: This deal marks one of many blockbuster transactions that have made headlines recently, as deal-making is on pace to break records this year. Global M&A for 2018 surpassed $2T this week, on track for the biggest M&A year in history. In the first quarter, the value of M&A deals increased 67 percent year-over-year, even though the number of deals dropped by 10 percent — indicating a bigger average deal size.

For more information about this transaction, click here to read the press release.

*Financial information from the press release and FactSet.

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