Roper Technologies, Inc. (NYSE:ROP) today announced that it has reached a definitive agreement to acquire Frontline Education in an all-cash transaction valued at approximately $3.725 billion. Including a tax benefit resulting from the transaction, the net purchase price is approximately $3.375 billion, representing approximately 19 times Frontline’s estimated 2023 EBITDA.
Frontline’s cloud-based software provides a connected platform of administrative solutions that are purpose-built for K-12 education, including human capital management, business operations management, student management, and analytics. More than 10,000 educational organizations, representing millions of educators, administrators, and support personnel, utilize Frontline’s tools to automate their operations and gain insights that enable improved efficiency and productivity.
“Frontline is a terrific business with clear niche market leadership, a proven track record of strong organic and inorganic growth, excellent cash conversion, and an outstanding management team that will thrive as part of Roper,” said Neil Hunn, Roper’s President and CEO. “The acquisition of Frontline demonstrates Roper’s disciplined capital deployment strategy that focuses on identifying high-quality, market-leading technology businesses that will enhance Roper’s cash flow compounding. We are excited to welcome Frontline to the Roper family.”
Frontline’s management team will continue to lead the business from its Malvern, Pennsylvania headquarters. Frontline’s name, brands, and office locations will not change as a result of the transaction.
Acquisition Financing and Financial Outlook
Roper anticipates funding the transaction using its cash on hand and revolving credit facility.
Frontline is expected to contribute approximately $370 million of revenue and $175 million of EBITDA in 2023.
Roper expects Frontline’s annual unlevered free cash flow to be approximately 100% of EBITDA.
The transaction is expected to close in the fourth quarter, subject to regulatory approval and customary closing conditions.
