Sunquest Information Systems Acquisition
Roper Industries, Inc. (NYSE:ROP)’s MHA acquisition pairs nicely with its earlier purchase of Sunquest Information Systems. Like MHA, Sunquest develops products and solutions that streamline and simplify various aspects of practice and patient management. Whereas MHA focuses on “second-tier” settings like pharmacies and long-term care facilities, Sunquest provides its services to hospitals and clinics. Roper’s $1.4 billion acquisition of Sunquest has given it a valuable foothold in this lucrative and fast-growing segment.
How the Company Looks Now/Possible Plays
It is clear that these acquisitions will significantly change Roper’s focus. For an example of how other companies expect to perform after strategic acquisitions click here. Between Sunquest’s focus on “first-tier” settings like hospitals and MHA’s focus on auxiliary settings, Roper Industries, Inc. (NYSE:ROP) suddenly has a robust healthcare software division that reaches many of the nation’s healthcare providers and patients. If it can continue to develop the services that these two firms offer, these pickups could prove to be tremendously beneficial to the company’s long-term outlook.
Roper’s healthcare services segment already appears to be gaining momentum. In 2012, its orders and revenues both increased by around 15 percent. What’s more, it seems to be working through a significant order backlog that could bolster its revenues for several quarters to come. It is important to note that Roper increased its full-year earnings estimates after inking the Sunquest deal.
In sum, Roper Industries, Inc. (NYSE:ROP)’s recent moves should interest investors who wish to gain exposure to the fast-growing medical and laboratory device sector without investing in risky start-ups or non-diversified players. Given the relative stability of Roper’s other businesses and the company’s robust financial performance, the company looks like a good long-term buy even at these somewhat inflated levels. The best way to play this situation may be a simple long position with tight stops.
The article Company Makes Aggressive Moves into the Healthcare Services Space originally appeared on Fool.com and is written by Mike Thiessen.
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