Jerry Revich: And in terms of the additional acquisitions that you have in the pipeline for the balance of the year, it sounds like it’s the same opportunity. We’re going to have an outsized benefit from consolidation since it’s all going to be within the existing footprint. So the M&A pipeline sounds like it’s going to come with higher synergies than, obviously, in the past it’s been a combination of these type of acquisitions and building up footprint. But correct me if I’m wrong, but it sounds like we’re going to see outsized synergy opportunities with the pipeline that you have planned?
Patrick Dovigi: Yeah. And they’re all in the existing footprint. Again, going back to opportunities, like Luke said, to consolidate sort of SG&A costs, consolidate, hauling facilities, move those trucks onto our existing routes and really focused around markets where we have underutilized post-collection assets, whether that’s recycling facilities, transportation, landfills, to drive incremental volumes for those facilities that we’re not getting, which is going to just yield exceptional sort of ROICs on those investments that we’re making.
Luke Pelosi: And Jerry, just in terms of the specific modeling, we typically think and see that initially these businesses are getting incorporated at margin decretive levels, right, just the normal core sort of pre-synergies. And then it’s with over those first sort of six months, nine months to 12 months, depending on the market and the business, where you then take them up to the accretive margins for the reasons you articulated.
Jerry Revich: Hey. Can I ask you on a separate topic? Landfill gas heading into the election, I’m wondering are you folks thinking about locking in any of the gas that you have coming online on long-term contracts or are you happy to bring it online with the RIN market structures, any updated thoughts on what the voluntary market looks like as well, if you don’t mind?
Patrick Dovigi: Yeah. I mean, things keep continuing, to trend in the right direction. From our perspective, we’re still selling into the transportation market today, particularly our partners at BP and OPAL continue to see that as the best way to maximize value today. Although, we are seeing the voluntary market prices continue to trend up to the point now where they’re exceeding mid-20s per MMBtu and heading closer to $30 per MMBtu. So I think you will see at some of our facilities come online, we’re going to start looking to enter into those longer-term contracts for a portion of the gas.
Jerry Revich: I appreciate the update. Thank you.
Patrick Dovigi: Thanks, Jerry.
Operator: Thank you. With our next question comes from Michael Hoffman from Stifel. Michael, your line is now open.
Michael Hoffman: Thank you very much. Good morning, Patrick, Luke. Just so…
Patrick Dovigi: Good morning.
Michael Hoffman: … maybe we prevent everybody from getting your numbers too high. If you spent $500 million, you probably bought between $160 million and $170 million of revenues at 25% margins. You’ve got to layer it in for eight months or nine months and then you walk them up into 2025. But that’s the walk-up, just so we don’t get ahead of ourselves?
Patrick Dovigi: Well, before we start, Michael, I want to — first, I want to say thank you to you because I know this is going to be your last call with us. And I think, you’ve done this industry, a great service for a long number of years and you’ve certainly been a very big help to lots of the company, particularly as we navigated going public over the last number of years. So I wanted to say thank you, not only from GFL, but for the rest of the industry for everything you’ve done for the industry, because you’ve been a very big champion of the industry for each and every one of us as companies, and I think, we owe you a big thank you for all you’ve done for the industry over the last number of years. And with that, I’ll turn it over to Luke, and he can walk you through.
Luke Pelosi: Michael, I echo everything that Patrick just said. So thank you and wishing you all the best of luck in your future endeavors, but look forward to catching up next week as well. On the specific M&A…
Michael Hoffman: Yeah.
Luke Pelosi: … what I’d say, Michael, is while the math you suggested would be normal in a typical GFL year, this year with Angelo’s, it’s a little bit sort of skewed, because the disproportionate amount of dollars went to one large vertically integrated asset. So what we said is for the $500 million, we actually got $100 million of revenue. Now the margin profile, because so much of it is coming out of a large vertically integrated, is much greater than typical and so that’s closer to a 40% number. And with that though, the basis of what the math you’re doing is absolutely right. So if you bought, call it $40 million of EBITDA and you got that sort of three quarters of the way through the year, the contribution in year would be in that sort of $30 million kind of range and that is the building block as it relates to M&A and then incremental M&A will have incremental contribution.
And then other points Kevin worth highlighting of commodity and other tailwinds are real, but as we all know, there will be headwinds. So we can’t only count the good guys, but you’re absolutely right. It’s more of the 2025 that you’ll get the full year benefit of all of that M&A spend plus the synergies.
Michael Hoffman: Okay. So and thank you very much for those kind comments. That was unexpected and very kind of you. Thank you. Following up, working capital, we should still presume it’s a use because you’re still growing the company. It’s just going to be a less of a use than it has been because you’re getting better at managing it. Is that the right way to think?
