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Exploring Roper Technologies’ Business and Background

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About Roper Technologies

Incorporated in 1981, Roper Technologies (ROP) is a diversified technology company that not only manufactures and distributes industrial equipment but also designs and develops software and solutions for a variety of niche end markets.

ROP provides products such as pumps, industrial automation equipment, and aftermarket services support. It also provides products and software in medical applications and digital imaging products, toll and traffic systems, card systems, metering, and remote monitoring.

ROP operates through 50 manufacturing locations and 70 sales service and administrative support locations. It serves customers in more than 90 countries.

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The company broadly operates in four segments: Medical and Scientific Imaging, RF Technology, Industrial Technology, and Energy Systems and Controls. Each segment has strong brands with leading positions within their respective niche end markets. These segments contributed around 34%, 29%, 21%, and 16%, respectively to the company’s consolidated revenue in 2015.

The company serves major end user markets and a variety of niche end markets, including healthcare, transportation, food, energy, water, education, and academic research. ROP employs ~11,000 people worldwide.

Roper Technologies’ acquisition strategy drives growth

Roper Technologies has been able to transform from an industrial enterprise into a diversified technology company by way of aggressive acquisitions. From the beginning of 2011 until the end of 2015, ROP deployed ~$5 billion for acquisitions. Sunquest, Managed Health Care Associates, and Aderant have been Roper’s three largest acquisitions. We’ll discuss some of the company’s recent acquisitions later in this series.

From 2010 to 2015, ROP’s revenue rose by 51%. ROP’s peer General Electric (GE) saw its revenue fall by 22% to $115 billion during the same period. Honeywell Industries’ (HON) revenue rose by 19% to $38 billion during the period. 3M Company’s (MMM) revenue also rose by 13% to $30.2 billion in 2015.

From June 10, 2015, to June 10, 2016, ROP fell by 2.1%, and the SPDR S&P 500 ETF (SPY) rose marginally by 0.3%. On a YTD (year-to-date) basis, ROP has fallen by ~7.6% compared to SPY’s rise of 4.8%.

Let’s understand more about Roper Technologies’ core competency, which has helped the company to continue its margin expansion.

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