Roper Technologies Inc.

The stable outlook on Roper reflects our expectation that its S&P Global Ratings-adjusted debt to EBITDA will decline below 3x by the end of 2022 despite some macroeconomic headwinds related to supply chains disruptions and cost inflation. Given its mix of asset-light software and services businesses featuring recurring revenue streams and healthy organic growth expectations, we expect the company will continue to generate strong and consistent free cash flow and sustain solid credit measures. While Roper may engage in debt-funded acquisitions from time to time, we expect it to deleverage to levels we consider acceptable for the current rating within a reasonable period following the transactions. We could lower our ratings on Roper if its financial policies become more aggressive

...Roper has maintained its strong operating performance. Despite the increasing uncertainty regarding the future path of the global economy, as well as ongoing supply chain headwinds and cost increases, Roper Technologies Inc. has continued to report very good results. During the third quarter ended Sept. 30, 2021, the company increased its organic revenue by 12%, maintained stable EBITDA margins, and reported a healthy increase in its free cash flow. We expect that Roper will continue to experience strong customer demand despite the challenging supply chain environment and ongoing cost inflation. We also expect the company's ongoing portfolio transformation decisions to support its overall profitability over the next few years. Specifically, we anticipate Roper will maintain its elevated focus on businesses with recurring revenue and higher organic growth levels as part of its portfolio transformation initiatives. Despite the material increase in its leverage following its purchase of Vertafore...

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