An Industrial Stalwart Goes All-In on Niche Software

One of the highest-valued industrial stocks is industrial no more.

- Brooke Sutherland

Roper Technologies Inc. announced June 1 that it was selling a majority stake in its remaining industrial businesses for $2.6 billion to private equity firm Clayton, Dubilier & Rice.

The deal includes the entire process technologies division, which makes pumps, compressors, and controls, plus some of Roper’s measurement and material analysis units. Roper will retain a 49% stake in the new entity, a position it intends to sell down over time. The transaction is the capstone in a multidecade strategy to refocus Roper on higher-margin and faster-growing software businesses less sensitive to economic cycles. Examples include business management software for law firms and software used to create visual effects for the movie industry.