Roper (ROP) Sells Scientific Imaging Businesses To Teledyne

Roper Technologies, Inc. (NYSE:ROP) recently announced that it closed the previously announced divesture of its Scientific Imaging businesses to Teledyne Technologies Incorporated (NYSE:TDY) for $225 million in cash. Notably, the divested businesses comprise Photometrics, Princeton Instruments, Lumenera and other brands.

The Scientific Imaging businesses are engaged in providing various imaging solutions for academic research, life sciences as well as customized OEM industrial imaging markets. Some of its notable brands such as Photometrics and Princeton Instruments provide high-resolution cameras, spectrographs and optics for advanced research in life sciences research, physical sciences as well as spectroscopy imaging. On the other hand, Lumenera is a provider of USB-based customized cameras, primarily for traffic management and life sciences applications markets.

The divestment is in sync with Roper’s inorganic growth strategy. The company is streamlining its business through acquisitions and divestitures. In this regard, in June 2018, the company inked a definitive agreement with Thermo Fisher Scientific Inc. (NYSE:TMO) to divest its wholly owned subsidiary — Gatan, Inc. This deal is expected to be completed by the second half of this year.

Roper has maintained a dominant position in most of the markets where it operates. Its diversified revenue stream also allows it to counter headwinds stemming from a cyclical business environment. We believe that the company’s innovative product pipeline is likely to be a major growth driver in the upcoming quarters.

Notably, for 2019, it anticipates gaining from healthy revenue generation opportunities. It predicts that organic sales will increase 3-5%. The company also expects stronger sales, the unique niche market strategy, healthy balance sheet and gains from acquired assets to drive its profitability in the year.

In the past three months, this Zacks Rank #2 (Buy) company has gained 2.9% against the industry’s decline of 0.3%.

Moreover, Roper remains committed to rewarding shareholders handsomely through dividend payments. It is worth mentioning here that the company increased the quarterly dividend rate by 12% or 5 cents per share to 46.25 cents in November 2018. On an annualized basis, the dividend increased to $1.85 from $1.65 per share. We believe that such initiatives are reflective of a strong cash position.

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