Roper Technologies Inc.

The outlook is stable. The company's adjusted debt to EBITDA should remain below 3x during this economic downtown, incorporating potential impacts related to COVID-19. Given Roper's mix of asset-light software and services businesses with recurring revenue streams, we expect the company to continue to generate strong and consistent free cash flow and solid credit measures. While the company may engage in debt-funded acquisitions from time to time, such as with the acquisition of visualization software company Foundry, management has a record of deleveraging, and we expect this pattern to continue. We could lower the ratings if Roper's financial policies become more aggressive (such as financing unexpectedly large acquisitions with no intent to deleverage), and its adjusted debt-to-EBITDA ratio exceeds 3.0x

...S&P Global Ratings expects revenues to be down low-single digits in 2020, driven by oil and gas and industrial-exposed businesses along with industrial declines amid the COVID-19 pandemic. Roper Technologies Inc. had a good start to the year with quarterly revenues up 5% with positive organic growth in three of its four segments. The Process Technologies sector was down about 10% in the first quarter and we expect the exposure to upstream businesses and inability to perform field services will result in unfavorable operating trends for the next few quarters. Overall, we believe the slowdown in industrial activity, exposure to oil and gas end markets, and weak demand in acute health care along with some project delays and termination of contracts by customers will result in a decline in overall revenues for fiscal 2020 in the low-single-digits percentage area and some margin contraction of between 100¡200 basis points (bps) over the next 12 months. This will be somewhat offset by its high...

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