Roper Technologies, Inc. (ROP) has made a significant move in the education technology space by acquiring Transact Campus, Inc. for a net purchase price of $1.5 billion. The acquisition, which includes a $100 million tax benefit, represents a multiple of 14 times the projected 2025 EBITDA.
Transact specializes in providing campus technology and payment solutions. This includes services like campus ID software, tuition payment processing, and point-of-sale systems. The company will be integrated with Roper’s CBORD business, which offers similar solutions to healthcare, education, and K-12 institutions. This merger promises to create a powerful entity in the market, leveraging the strengths of both companies.
The acquisition is set to close in the current quarter, financed by Roper’s cash reserves and revolving credit facility. As of June-end, Roper had $251.5 million in cash and equivalents.
Roper anticipates significant benefits from the acquisition, including cost synergies and long-term, high, single-digit organic revenue growth from Transact. Transact is projected to generate around $325 million in revenue and $105 million in EBITDA in 2025, with the merger anticipated to boost these figures.
The combined business will operate under both the Transact and CBORD brand names, led by Transact’s CEO, Nancy Langer, and CBORD’s CEO, Dan Park, as Chief Operating Officer.
Neil Hunn, Roper Technologies’ President and CEO, expressed enthusiasm about the acquisition, stating, “Transact is an excellent business that meets all of our acquisition criteria, including mission-critical solutions, strong customer retention, and excellent cash conversion.”
He added, “Bringing together Transact and CBORD and leveraging each business’s unique core competencies will expand and accelerate the innovation they will bring to their customers.”
Roper Technologies’ acquisition of Transact Campus signifies a strategic move to expand its presence in the growing market for education technology and payment solutions. The combined entity is poised to deliver enhanced solutions and services to a wider range of institutions and students. Investors can gain exposure to Roper Technologies through ETFs like the Invesco Global Water ETF (PIO) and Invesco Water Resources ETF (PHO).
ROP shares closed higher by 3.52% at $546.57 on Thursday, reflecting positive investor sentiment towards the deal.
