SARASOTA, Fla., Jan. 25, 2024 (GLOBE NEWSWIRE) — Roper Technologies, Inc. (Nasdaq: ROP) today announced that it has reached a definitive agreement to acquire Procare Solutions for a net purchase price of approximately $1.75 billion, including a $110 million tax benefit resulting from the transaction. The net purchase price represents approximately 18 times Procare’s estimated EBITDA for the twelve months ending March 31, 2025.
Procare is a leading provider of cloud-based software for the management of early childhood education centers. Procare’s purpose-built solutions serve as the system-of-record and workflow software for childcare centers, managing all aspects of day-to-day operations, including parent engagement, staff and teacher scheduling, classroom management, tuition billing, and payment processing. More than 37,000 childcare organizations utilize Procare’s tools to digitally transform their operations and maintain strong relationships with their families and staff.
“Procare is a terrific business with clear niche market leadership, mission critical solutions, strong organic revenue growth, a high recurring and reoccurring revenue mix, outstanding customer retention, and excellent cash conversion,” said Neil Hunn, Roper Technologies’ President and CEO. “This acquisition demonstrates Roper’s disciplined capital deployment strategy that focuses on identifying high-quality, market-leading technology businesses that will enhance Roper’s long-term cash flow compounding. Procare has multiple paths to deliver long-term mid-teens organic growth, and we look forward to partnering with the Procare team to execute their strategy.”
Procare’s management team will continue to lead the business from its Denver, Colorado headquarters. Procare’s name, brands, and office locations will not change as a result of the transaction.
Acquisition financing and financial outlook
Roper anticipates funding the transaction using its revolving credit facility.
Procare is expected to contribute approximately $260 million of revenue and $95 million of EBITDA for the twelve months ending March 31, 2025, and will be reported in Roper’s Application Software segment. The transaction is expected to be accretive to Roper’s 2024 free cash flow and 2025 adjusted DEPS. Roper expects Procare to deliver long-term mid-teens organic revenue growth.
Roper’s management team looks forward to discussing this acquisition during its fourth quarter 2023 financial results conference call scheduled to take place at 8:00AM ET on Wednesday, January 31, 2024.
The transaction is expected to close later this quarter, subject to regulatory approval and customary closing conditions.
Use of non-GAAP financial information
Roper supplements its consolidated financial statements presented on a GAAP basis with certain non-GAAP financial information, including EBITDA, to provide investors with greater insight, increase transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making. Roper defines EBITDA as earnings before interest, taxes, depreciation, and amortization. Roper has not provided a reconciliation of the expected EBITDA contribution by Procare to the expected net income contribution by Procare for the twelve months ending March 31, 2025 because we are unable to quantify certain amounts that would be required to be included in Procare’s contribution to net income without unreasonable efforts. In addition, Roper believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors. The non-GAAP financial measure disclosed by Roper in this press release should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP, and the financial results prepared in accordance with GAAP and reconciliations from these results should be carefully evaluated.
About Roper Technologies
Roper Technologies is a constituent of the Nasdaq 100, S&P 500, and Fortune 1000. Roper has a proven, long-term track record of compounding cash flow and shareholder value. The Company operates market leading businesses that design and develop vertical software and technology enabled products for a variety of defensible niche markets. Roper utilizes a disciplined, analytical, and process-driven approach to redeploy its excess capital toward high-quality acquisitions. Additional information about Roper is available on the Company’s website at www.ropertech.com.
About Procare Solutions
For more than 30 years, Procare Solutions has been helping early childhood educators simplify operations and create meaningful connections with families, so they can focus on what matters most – the children in their care. From registration, attendance tracking, staff management and lesson planning to family engagement, tuition collection and reporting, Procare helps ease the challenges faced of running a childcare business. Procare’s dedicated team of support professionals also make it easy to get up and running quickly and answer questions along the way. That’s why over 37,000 customers choose Procare. For more information, visit procaresoftware.com.
