Neal Lux: Thanks Eric.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Dan Pickering from Pickering Energy Partners.
Dan Pickering: Good morning, guys. Thanks for doing the call today. I guess I want to come back, Neal, your comment around sort of M&A. You indicated – and Neal and Lyle, I think you both talked about this, but you indicated accretive as one of your measures. Is that accretive to – is it EBITDA margin? Is it net income? How – what metric are you thinking about there just so we can kind of gauge as you move ahead?
Neal Lux: Accretive to EBITDA margins, Dan.
Dan Pickering: Got it. Okay. And I –
Neal Lux: A good strategic fit, that’s the key. We’re not – we wouldn’t look to do M&A just to get bigger, but we want to have the right strategic fit and obviously improve our financial metrics.
Dan Pickering: Sure. And so accretive to EBITDA margins, I assume that also means you’d look for things if you’re granted, you’re trading at cheap valuations, but you’d look for something that would be accretive on an EV to EBITDA basis as well?
Neal Lux: Correct. Yes.
Dan Pickering: Okay. You talked a little bit about the areas that you’d focus in terms of your product lines. Do you think – I mean maybe cast for us, while you said the markets are better, if you think about sort of your chalkboard of things that you’re evaluating in terms of potential acquisitions, do they skew more international versus domestic? And are the numbers – I mean the number of opportunities, is it up notably or flattish? Just kind of give us some color there.
Neal Lux: Sure. So I think generally, the opportunities we’ve seen have been more U.S. focused. However, with the age of the companies that we’re looking at, they would be ideal to ramp up and utilize our international footprint to expand sales. So I think that would be a key business logic and synergy we would look for there. And Lyle looks at the deals every day and maybe can comment on the rate of change we’ve seen.
Lyle Williams: Yes. Dan, I’d say we’ve seen activity level pick up pretty meaningfully here over the last several months, more private companies looking to find an opportunity here in this market. We’ve talked about it before, but there are number of private equity firms who’ve been in their deals for quite a while, and they’re starting to see this as a market where maybe they should do something. When we think kind of types and areas of focus, kind of a couple areas there. One, we feel like we’ve proven and could be a very logical consolidator of space. So about this time last year, we announced our acquisition of Hawker Well Works, relatively small business but fit within our drilling products and allow us to consolidate a really neat niche in the well services market.
Another example of what we might look for is things that have technology. And we’ve mentioned before, but a key way we think we drive margins higher in the future is through the deployment of new technology in our products. So couple of areas, whether that’s a consolidation of space or new technology. And the last criteria, I would say, is looking at things that would be more attractive to us, are more well count driven rather than aimed at the more capital end of our specter that, that would be another criteria to look at.
