November 5, 2015

Roper Technologies Acquires Aderant – A Strong Validation for a Niche Sector

Roper Technologies recently acquired Aderant, which essentially provides an ERP system for large and medium size law firms.  Over ten years ago, Aderant was acquired by Francisco Partners.  The Company then changed hands to another private equity firm, Vista Equity Partners, in 2008.  The private equity revolving door went around again in 2012 when Madison Dearborn Partners acquired a controlling position in the company.  This time an industrial technology company, Roper Technologies, with no existing business in the legal or closely related industry has stepped up and paid $675 million for the business.  Roper expects Aderant to generate $125 million in revenue in 2016, which means the company will probably post $100 – $110 million in revenue for 2015.  This yields a very healthy 2015E revenue multiple between 6.1x – 6.8x.

Roper Technologies doesn’t acquire businesses to just milk cash flows.  It strategically pursues niche leaders in healthy and promising markets with high growth potential.  The Outsourced Legal Services and Technology market has been flying under the radar and we believe it offers lucrative opportunities for investors.  This transaction is a strong validation of our thesis, one we have held for some time.