Roper Technologies Inc announced a $5.35 billion deal with Vertafore Inc, a private equity-owned insurance software vendor, making it the largest takeover deal to date.
Acquiring Vertafore would be in line with Roper’s strategy of snapping up software companies in niche markets with strong recurring revenues.
It also signals that the highly acquisitive company has not given up on its expansion plans in the wake of the COVID-19 pandemic, which has caused some of its customers to review their spending plans.
Vertafore, based in Denver, is one of the primary vendors of software to the property and casualty insurance industry. Vista and Bain acquired the company in 2016 from private equity firm TPG for $2.7 billion, including debt.
Roper expects Vertafore to contribute about $590 million of revenue and $290 million of earnings before interest, taxes, depreciation, and amortization in 2021.
Insurance software companies have seen rising demand for products that give customers instant access to their information and help insurance providers cut costs.
Roper expects the acquisition to close in the third quarter and be immediately cash accretive.J.P. Morgan and Wells Fargo Securities served as financial advisers to Roper.