This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Roper Technologies. 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.
Our guest is 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.
Show Notes
(00:00:00) – Introduction
(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