Roper Technologies considers selling process technology unit for $3B - Bloomberg

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• Roper Technologies (NYSE:ROP) is exploring the sale of its process technology division, a transaction that could bring in as much as $3B, Bloomberg reports, citing people familiar with the matter.
• The industrial conglomerate has hired a financial adviser to consider its options for the business, and Roper (ROP) is open to selling the division outright or in pieces, the people told Bloomberg.
• The possible transaction comes as the company seeks to focus on its core technology assets that serve the oil, gas, and other industrial industries.
• Earlier this month, Roper (ROP) agreed to sell its TransCore business to Singapore Technologies Engineering for $2.68B, and earlier today agreed to sell its CIVCO Radiotherapy unit for ~$120M.

Comments

[Allen Greathouse]

This is actually big news. Selling off the processing business would focus Roper into a company that is >80% software. Should lead to a sector reclassification and addition to some highly tracked tech indices. Massive undervaluation here

[Value Investment Club]

@John Greathouse Very interesting and I would agree that if it were more than 80% software driven revenue, you would expect a stickier base, higher margins, and a higher multiple. Right now, it trades at 32x, that’s pretty high. How much more of a multiple do you think it should get? On the flip side, someone like AMETEK, which is a diversified industrial, has much less software driven revenue, I would bet you it’s less than 20% (maybe even less than 10% of it’s revenue) and it trades around a 30x multiple. Maybe AME is overvalued. Food for thought.

[bluescorpion0]

@Value Investment Club company reminds me of the portfolio the private fund Toma Bravo has put together in software.