This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Roper Technologies. Roper is a fascinating case study in how an old industrial business can pivot into a new world focused on software and technology. Roper was founded in 1890 as a manufacturer of industrial equipment and home appliances but, today, it is one of the most profitable software businesses in the world. Much of the pivot and subsequent value creation can be credited to Brian Jellison, who took over in 2001.
To break down Roper, I’m joined by Joseph Shaposhnik, portfolio manager of the TCW New America Premier Equities Fund. We discuss the business’s roots, Jellison’s acquisition strategy, and how Roper compares to other niche software acquirers like Constellation Software. Please enjoy this business breakdown of Roper Technologies.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Show Notes
(00:02:38) - (First question) - Basic overview of Roper
(00:05:24) - The businesses history and its pivot away from its roots
(00:08:53) - Brian Jellison’s background and his appreciation for software businesses
(00:14:23) - The way Brian Jellison would distinguish himself from others in his space
(00:20:35) - His focus on acquiring new businesses vs building them himself
(00:26:08) - The 3 dials he used to assess capital allocation decisions and the performance of companies
(00:29:12) - How they are able to grow and expand margin after acquisitions
(00:30:58) - Difference between other vertically integrated businesses like Constellation
(00:34:19) - The succession plan at Roper
(00:38:00) - Risks to that people should think about when it comes to Roper
(00:41:44) - Lessons learned from Roper
