Roper Technologies, Inc. (NYSE:ROP)
Roper Technologies, Inc. (NYSE:ROP) announced that it has achieved a definitive agreement to acquire Frontline Education in an all-cash deal with an estimated value of about $3.725 billion. The sale will result in a tax benefit; thus, the net purchase price will be roughly $3.375 billion. This is equivalent to approximately 19 times Frontline’s expected 2023 EBITDA.
Cloud-based software from Frontline offers a connected platform of administrative solutions designed specifically for K-12 education. These solutions include human capital management, business operations management, student management, and analytics. More than 10,000 educational institutions, which collectively employ millions of teachers, administrators, and support staff, make use of the tools that Frontline provides to automate their business processes and acquire insights that make it possible to increase both efficiency and productivity.
According to Neil Hunn, President, and CEO of Roper Technologies, Inc. (NYSE:ROP), “Frontline is a superb business with clear niche market leadership, a proven track record of strong organic and inorganic development, exceptional cash conversion, and an amazing management team that will thrive as part of Roper.” “The acquisition of Frontline demonstrates Roper’s disciplined capital deployment strategy,” which focuses on identifying high-quality, market-leading technology businesses that will enhance Roper’s cash flow compounding. “The acquisition of Frontline demonstrates Roper’s disciplined capital deployment strategy.” We are pleased to announce that Frontline has joined the Roper family.
From its current location in Malvern, Pennsylvania, Frontline’s management team will continue to steer the company’s overall direction. As a result of the sale, Frontline will maintain its name, branding, and office locations in their current state.
Financing for the Acquisition, as Well as Financial Projection
Roper Technologies, Inc. (NYSE:ROP) plans to finance the deal with the cash it currently possesses and its revolving credit line.
In 2023, it is anticipated that Frontline will generate roughly $370 million in sales and $175 million in EBITDA.
Roper Technologies, Inc. (NYSE:ROP) anticipates that Frontline’s annual unlevered free cash flow will equal the company’s EBITDA.
The acquisition is anticipated to be finalized during the fourth quarter, provided that regulatory approval and other normal closing conditions are met.
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