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Roper Buying MHA Health-Care Services Provider

By Rich Smith - Apr 17, 2013 at 6:00PM

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A good bargain on price entices Roper away from its core business.

Sarasota, Fla.-based Roper Industries (ROP 0.41%) took a step away from its core industrial manufacturing business Wednesday, announcing its intent to buy New Jersey-based Managed Health Care Associates, or MHA.

MHA provides software, business analytics, and other services to various long-term care pharmacies, assisted-living facilities, long-term care facilities, and infusion and specialty pharmacies in the markets it serves.

Roper puts the purchase price at $1 billion, or approximately 10.5 times MHA's expected earnings before interest, taxes, depreciation, and amortization over the next 12 months. As such, Roper appears to have good reason for shifting away from its core business a bit: It's getting a bargain relative to the 13 times EBITDA valuation that its own shares command.

Investors appear to agree. Roper shares, which sagged in Wednesday trading, began to perk up after hours -- gaining as much as 0.7% as of this writing, and topping $121.

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