Roper Industries to Acquire TransCore Holdings in $600M Transaction

Roper Industries, Inc. announced that it has signed a definitive agreement to acquire TransCore Holdings, Inc. from an investor group led by KRG Capital Partners, L.L.C. in a transaction that will be valued at close to $600 million. TransCore is a provider of technologies and related services in areas such as radio frequency identification (RFID), satellite-based communication, mobile asset tracking, security applications and comprehensive toll system and processing services. Roper expects the addition of TransCore and a related financing initiative to add between $0.10 and $0.15 to 2005 diluted earnings per share. The acquisition is expected to close before the end of the year, and will be subject to anti-trust review and customary closing conditions.

In a company news release, Roper Industries Chairman, President and CEO Brian Jellison said, "The acquisition of TransCore will establish another powerful strategic growth platform for Roper. It has a large base of recurring business and complementary technologies and market channels that can be leveraged across our portfolio of leading RF and imaging businesses. Similar to the existing Roper businesses, TransCore is widely regarded as a leading provider of engineered products with technologies, service capabilities and application expertise to serve the growing needs of customers. As such, it has historically generated strong margins and cash flows, and established many long-standing customer relationships that generate substantial recurring revenue."

According to Roper Industries, TransCore will operate as a standalone segment and will market its products under its own brand names. TransCore's senior management team, led by President and CEO John Worthington, will continue to operate TransCore, which is headquartered in Harrisburg, Penn., and which employees 1,800 staff members in North America.

TransCore's current offerings include proprietary RFID tags and readers, and satellite-based communication hardware and accessories. The company's technology has been used in traffic control and toll systems, as well as for asset productivity and automated business processes. The company's customers are descrived as "tolling authorities and a wide range of businesses with security and asset location and tracking requirements." The company has made recent moves to expand into homeland security and electronic vehicle registration. Roper Industries said they expect TransCore to show total sales at the end of this fiscal year to be approximately $365 million

In a company statement, Roper also announced a financing initiative designed to enhance its balance sheet and fund the acquisition. Roper has received commitments from JPMorgan Chase Bank and Wachovia for a senior secured credit facility consisting of term loans and a revolving credit line. In addition, Roper has plans to raise $250 million of cash through the issuance of common stock.