David Dullum: And Kyle, I might just briefly add to that, and as Rachel said in her part of the call, we’ve had a fairly successful ATM program, of course, which we sort of put in place, being able to, and we’re very rigorous on what the cushion is, if you will relative to NAV, and we’re going to stick with that. So we’re not going to do anything crazy there, but it gives us the ability to especially looking forward in the expectation, hopefully we can start doing some newer deals and obviously using some of this leverage that we’re likewise providing the support from the equity side to, as Rachel said, be able to maintain a level of the coverage ratio that’s not going to put us at risk in that regard.
Kyle Joseph: Got it, very helpful. And then one followup from me, just talking about the competitive environment of essentially lower middle market private equity. Obviously you expect deal flow to pick up, but on the other side would be competition. And has the market really changed as we’ve seen, rates go from essentially zero to substantially higher, even with some potential cuts this year?
David Dullum: Yes, I would say the market really what we’re seeing and what kind of got reflected, I think near the end of last year, at least from our perspective, it may not be across the board, but I can only speak from our vision is that the rates coming, going up, of course, helped to slow down the ability for not only the cost, but also the amount of leverage was being available. So those deals I think that were getting done were to some extent perhaps being over equitized, if you will, to get the deals done. We’re seeing that might change a little bit, but not to the point where I think it’s again going to be all of a sudden leverage goes back to really high multiples of EBITDA. I think it’s still going to be fairly cautious and careful.
And again, I think again, as I said, even though there are some deals we’re seeing where the relative enterprise value might be one or two turns higher than we think it’s worth, clearly there are folks willing to do those deals, and if they are, I think they are having to do a little bit more equity than debt. I don’t think the debt side of the equation has gotten to the point yet where we’re back to much higher leverage per transaction even at these higher values. Does that make any sense?
Kyle Joseph: Yes, very helpful. Thanks for taking my questions.
David Dullum: Yes sir.
Erich Hellmold: Okay, next question?
Operator: Our next question comes from Bryce Rowe from B. Riley Securities. Please proceed.
Bryce Rowe: Thanks a lot. Good morning.
David Dullum: Hey, Bryce.
Bryce Rowe: Hey Dave. Hey, how are you?
David Dullum: Good, awesome.
Bryce Rowe: Hey, I wanted to ask about the upsized credit facility you’ve had. I guess some changes. I think you took the available amount down last quarter and obviously it’s moved back up. So maybe there was a bit of a process to get to that higher level. Could you just, if you can kind of talk about that process and did you add some banks to the facility? Just any kind of detail there would be helpful, thanks.
Rachael Easton: Yes, absolutely. Good morning, Bryce. So yes, we were really excited to announce yesterday that we have expanded the credit facility up towards $200 million. When we went through our regular amendment process, which closed in October at the beginning of the quarter and we weren’t able to announce in our last earnings call, we had taken it down to $135 million and that was a result of just losing a couple of banks during that process. We were working on this expansion. Unfortunately, we couldn’t get the two to close at the same time. So, we were able to increase the facility by bringing in a new bank. We brought in Fifth Third, and we were also able to increase one of the other bank’s commitments as well to get back up to that $200 million amount. And we believe this additional capacity is really important in providing flexibility as we contemplate future pipeline in the deal flow process.
Bryce Rowe: Got it. That’s helpful context, Rachael. And then maybe one for Dave. You had this add-on opportunity for an existing portfolio company here this quarter. Can you just talk a little bit about that? And then maybe other opportunities in the pipeline for your existing portfolio companies to do add-on acquisitions. Thanks.
David Dullum: Sure. So, that particular one, Bryce, was a company that we’ve had in the portfolio for a few years. It’s somewhat of an industrial based business. We’ve been really improving it all around, both from the overall management level, et cetera. And we had an opportunity to acquire a fairly substantial sized business to bring into it, which was really integrated very nicely with the product. And it not only gave us additional capacity, manufacturing capacity, but also distribution and access, actually in Europe and other parts of the country. So we took our company from order magnitude. Now, I’m not going to give you specifics, but order magnitude, about $40 million to $50 million in revenue to over $100 million in revenue, and very significant increase in the EBITDA.
