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Roper (ROP) Prices $2.7B Worth of Senior Notes Offering
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Roper Technologies, Inc. (ROP - Free Report) yesterday announced the pricing of $2.7 billion worth of senior notes. Subject to the fulfillment of customary conditions, the public offering of notes is expected to close on Sep 1, 2020.
It is worth mentioning here that the company’s shares lost 0.5% yesterday, ending the trading session at $439.00.
Inside the Headlines
As noted, the offerings will comprise $300 million of 0.450% senior notes due to expire on Aug 15, 2022; $700 million of 1.000% senior notes due to expire on Sep 15, 2025; $700 million of 1.400% senior notes due to expire on Sep 15, 2027; and $1 billion worth of 1.750% senior notes due to mature on Feb 15, 2031. The notes offered will be considered as Roper’s senior unsecured obligations.
Notes due to expire in 2022 have been priced at 99.913% of the principal amount. On the other hand, the 2025 notes have been priced at 99.868% of the principal amount, while the 2027 notes have been offered at 99.860% of the principal amount. The notes to mature in 2031 have been priced at 99.839% of the principal amount.
Interest on the senior notes will be paid out semi-annually — each on Feb 15 and Aug 15 for the 2022 notes and 2031 notes as well as on Mar 15 and Sep 15 for the 2025 notes and 2027 notes. The first interest payment will be made on Feb 15, 2021, for the 2022 notes and 2031 notes, while the same will be paid out on Mar 15, 2021, for the 2025 notes and 2027 notes.
Notably, Roper will have to compulsorily redeem all the senior notes if the Vertafore buyout is not completed on or before Feb 12, 2021, and the date of termination of Vertafore’s acquisition agreement (whichever date comes earlier). Per the special mandatory redemption, the price for the notes will be 101% of the principal amount plus interest (accrued and unpaid).
It is worth mentioning here that Roper will acquire Denver, CO-based Vertafore for $5.35 billion cash. The buyout, announced on Aug 13, is expected to be completed in third-quarter 2020. (For more information on the buyout please read: Roper Enters Contract to Acquire Denver-Based Vertafore)
In addition to the special redemption, the issuer has the option to redeem the 2022 senior notes before Aug 15, 2022, for a consideration equal to Treasury+10 basis points and accrued interest, if applicable. For the 2025 notes, the redemption can be done before Aug 15, 2025, for Treasury+15 basis points or at par plus accrued interest (if applicable) on or after Aug 15, 2025.
The option redemption for the 2027 notes can be done before Jul 15, 2027, for Treasury+15 basis points. If the redemption is done on or after Jul 15, 2027, the redemption price will be equal to the par value plus accrued interest (if applicable). Similarly, for the 2031 notes, the optional redemption can be done before Nov 15, 2030, for Treasury+20 basis points or at par plus accrued interest (if applicable) on or after Nov 15, 2030.
Notably, the offering’s rating is expected to be Baa2 (Stable) by Moody’s and BBB+ (Stable) by S&P.
Roper will use part of the funds raised from the notes offering for paying for the Vertafore buyout and its related expenses. The remaining proceeds will likely be used for satisfying general corporate purposes.
We believe that the offerings of senior notes will increase the company’s debts and in turn, might inflate its financial obligations and hurt profitability. Exiting the second quarter of 2020, its long-term debts were at $5,263.8 million, reflecting a 12.6% increase from the previous quarter. The company’s interest expenses totaled $47.5 million in the second quarter, reflecting a sequential increase of 4.6%.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $46.2 billion, Roper currently carries a Zacks Rank #3 (Hold). The company is likely to gain from strengthening medical product and network software businesses, cost-control measures, and buyouts. However, the pandemic-led uncertainties as well as high costs and leverage are major concerns.
In the past three months, the company’s share price has increased 19.3% compared with the industry’s growth of 21.2%.
The Zacks Consensus Estimate for its earnings is pegged at $12.48 for 2020 and $13.29 for 2021, reflecting growth of 2.6% and 2.5% from the 30-day-ago figures. However, the estimate of $3.01 for the third quarter has been lowered by 2.3% in the past month.
Three better-ranked stocks in the industry are Chart Industries, Inc. (GTLS - Free Report) , Altra Industrial Motion Corp. and Graco Inc. (GGG - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 46.51% for Chart Industries, 76.47% for Altra Industrial and 37.04% for Graco.
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Roper (ROP) Prices $2.7B Worth of Senior Notes Offering
Roper Technologies, Inc. (ROP - Free Report) yesterday announced the pricing of $2.7 billion worth of senior notes. Subject to the fulfillment of customary conditions, the public offering of notes is expected to close on Sep 1, 2020.
It is worth mentioning here that the company’s shares lost 0.5% yesterday, ending the trading session at $439.00.
Inside the Headlines
As noted, the offerings will comprise $300 million of 0.450% senior notes due to expire on Aug 15, 2022; $700 million of 1.000% senior notes due to expire on Sep 15, 2025; $700 million of 1.400% senior notes due to expire on Sep 15, 2027; and $1 billion worth of 1.750% senior notes due to mature on Feb 15, 2031. The notes offered will be considered as Roper’s senior unsecured obligations.
Notes due to expire in 2022 have been priced at 99.913% of the principal amount. On the other hand, the 2025 notes have been priced at 99.868% of the principal amount, while the 2027 notes have been offered at 99.860% of the principal amount. The notes to mature in 2031 have been priced at 99.839% of the principal amount.
Interest on the senior notes will be paid out semi-annually — each on Feb 15 and Aug 15 for the 2022 notes and 2031 notes as well as on Mar 15 and Sep 15 for the 2025 notes and 2027 notes. The first interest payment will be made on Feb 15, 2021, for the 2022 notes and 2031 notes, while the same will be paid out on Mar 15, 2021, for the 2025 notes and 2027 notes.
Notably, Roper will have to compulsorily redeem all the senior notes if the Vertafore buyout is not completed on or before Feb 12, 2021, and the date of termination of Vertafore’s acquisition agreement (whichever date comes earlier). Per the special mandatory redemption, the price for the notes will be 101% of the principal amount plus interest (accrued and unpaid).
It is worth mentioning here that Roper will acquire Denver, CO-based Vertafore for $5.35 billion cash. The buyout, announced on Aug 13, is expected to be completed in third-quarter 2020. (For more information on the buyout please read: Roper Enters Contract to Acquire Denver-Based Vertafore)
In addition to the special redemption, the issuer has the option to redeem the 2022 senior notes before Aug 15, 2022, for a consideration equal to Treasury+10 basis points and accrued interest, if applicable. For the 2025 notes, the redemption can be done before Aug 15, 2025, for Treasury+15 basis points or at par plus accrued interest (if applicable) on or after Aug 15, 2025.
The option redemption for the 2027 notes can be done before Jul 15, 2027, for Treasury+15 basis points. If the redemption is done on or after Jul 15, 2027, the redemption price will be equal to the par value plus accrued interest (if applicable). Similarly, for the 2031 notes, the optional redemption can be done before Nov 15, 2030, for Treasury+20 basis points or at par plus accrued interest (if applicable) on or after Nov 15, 2030.
Notably, the offering’s rating is expected to be Baa2 (Stable) by Moody’s and BBB+ (Stable) by S&P.
Roper will use part of the funds raised from the notes offering for paying for the Vertafore buyout and its related expenses. The remaining proceeds will likely be used for satisfying general corporate purposes.
We believe that the offerings of senior notes will increase the company’s debts and in turn, might inflate its financial obligations and hurt profitability. Exiting the second quarter of 2020, its long-term debts were at $5,263.8 million, reflecting a 12.6% increase from the previous quarter. The company’s interest expenses totaled $47.5 million in the second quarter, reflecting a sequential increase of 4.6%.
Zacks Rank, Estimate Trend and Price Performance
With a market capitalization of $46.2 billion, Roper currently carries a Zacks Rank #3 (Hold). The company is likely to gain from strengthening medical product and network software businesses, cost-control measures, and buyouts. However, the pandemic-led uncertainties as well as high costs and leverage are major concerns.
In the past three months, the company’s share price has increased 19.3% compared with the industry’s growth of 21.2%.
The Zacks Consensus Estimate for its earnings is pegged at $12.48 for 2020 and $13.29 for 2021, reflecting growth of 2.6% and 2.5% from the 30-day-ago figures. However, the estimate of $3.01 for the third quarter has been lowered by 2.3% in the past month.
Roper Technologies, Inc. Price and Consensus
Roper Technologies, Inc. price-consensus-chart | Roper Technologies, Inc. Quote
Stocks to Consider
Three better-ranked stocks in the industry are Chart Industries, Inc. (GTLS - Free Report) , Altra Industrial Motion Corp. and Graco Inc. (GGG - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), both Altra Industrial and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 46.51% for Chart Industries, 76.47% for Altra Industrial and 37.04% for Graco.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>