EUR 850.00 For Business Accounts Only

Morningstar | Long-Time Roper CEO Brian Jellison Steps Down Due to Illness; Maintaining Exemplary Stewardship

Narrow-moat-rated Roper Technologies announced on Aug. 24 that CEO Brian Jellison will step down to “focus on his health” following the “diagnosis of a medical condition” at the end of last week. Jellison will remain executive chairman, but given the gravity of the announcement (as indicated by the sudden news), we wouldn’t be surprised if his remaining tenure in the role will be more short term. Jellison was responsible for impressively taking the firm from a $22 per share market price to nearly $300 most recently. However, since we don’t see a shift in Roper’s strategy of focusing on recurring revenue in niche markets and emphasizing software for engineered products, we are maintaining our Standard stewardship rating, as well as our $226 fair value estimate.

Jellison was conspicuously absent from the Electrical Products Group conference--an annual gathering of the largest multi-industrials--in Sarasota, Florida, earlier this year because of an illness. Co-presenting at the EPG podium and taking the lead that day was COO Neil Hunn, who incidentally was named Jellison’s successor. Hunn was previously the VP of Roper’s more medically related businesses and came to Roper by way of MedAssets, an Atlanta-based software-as-a-service firm. Hunn also has been deeply involved in charting Roper’s strategy with Jellison, so we’re not surprised by his selection--indeed, we felt he was the natural choice given his technology background and extensive experience, with seven years in a position of primary responsibility at the firm, including intimate involvement with capital allocation decisions (there is no M&A team at Roper). He also did a great job articulating the firm’s asset-light, technology focus to the market, and we expect him to continue with the same playbook.