And we’re trying to focus on those type of businesses as we execute on our M&A strategy in both the resin business and also in the downstream, in our paper business. With respect to the stock purchase plan for our colleagues, this actually emanated from requests from our employees. We had a number of requests as we went around to plants around the world from probably colleagues who had worked at other places that had this and they said, hey, look, we really like what’s going on in the company? Could we entertain something like this and so we presented to the board, they approved it. And we had good take-up in the first initial quarter of application and have had really nice feedback from our colleagues. So we look forward to it growing from here.
George Staphos: Was there any sort of discussion about — like what kind of discount are you giving your employees to buy the stock, right? Others would like a discount too in the market but…
Larry Hilsheimer: Yes, it’s a 15% discount which is pretty standard in these programs.
Operator: [Operator Instructions] Our next question will come from Gabe Hadi of Wells Fargo.
Gabe Hadi: I’m curious, and again, a lot of ground has been covered and it’s challenging to answer a question like this. But from a competitive landscape standpoint, more specifically thinking about the more mature markets in North America and Europe. Do you believe that we’ve seen sort of higher cost of capital manifest in different pricing behavior or competitive activity in the markets in which you participate, or is that something that we still think is on the come, would be my first question?
Larry Hilsheimer: Yes, I don’t know that we would necessarily attribute competitive behavior to their cost of capital, although, obviously, in our GIP business, one of our primary competitors is very highly levered. So it does put pressure on them, but think it puts pressure in the right direction. So that’s a good thing. I mean, the place where we’re seeing that really play out more is in our strategic M&A activities. I mean it’s clearly put the PE model is in a much different position than they were two or three years ago and puts us in a very, very good position relative to what we’re trying to do in the market. So no, that’s not exactly responsive to what your question was, Gabe. But we see the favorability there. We’re not seeing anything in the competitive marketplace that I would attribute to their cost of capital, at least that we could discern.
Gabe Hadi: Well, maybe ask the question a little bit better. In a down demand environment would be just intuitively how you would think about competitors coming out and maybe being a little bit more aggressive to pick up business and keep share. Are you seeing that? Or — again, it kind of seems like based on your results, the answer is no and the fact that you’re able to price for value?
Ole Rosgaard: Gabe, I can give you a crystal clear yes to that.
Gabe Hadi: And then I guess just one last one. Appreciating that there’s some math behind it, but you made a pretty strong statement that still sounds like you’re going to be out doing some M&A. The pipeline is pretty full. Is there a point at which share repurchase becomes more compelling than maybe deploying capital on the M&A side or is it not a binary decision like that from a, I guess, mathematical return standpoint?
Larry Hilsheimer: Yes, I don’t think it’s binary. I guess, if we found that we could not deploy capital in attractive M&A along our strategic objectives then it would become more compelling to start buying shares back because we continue to believe our shares are phenomenally undervalued. I think our multiples are stupid low. But that said, the M&A deals we are doing, the returns that we’ve got forecast are quite compelling. And to the extent that we continue to had those type of opportunities, we will go down that path. I mean I don’t remember — Matt talked about this. I mean the ColePak deals at 8 times and then after synergies that we’ll get from integration price is 6. So if we can do deals like that, that are high margin, high cash flow conversion at those kind of multiples, we’ll be doing that for a long time before we do a lot of capital on stock repurchase.
But if we can’t then we’ll go the other way, and these are not mutually exclusive. Like I said, we will be doing some stock repurchase stuff opportunistically over the next year as well.
Gabe Hadi: Last one for me. I know George was pushing that working capital a little bit. CapEx has been elevated over the past two years. I think I read some articles over the past week or so that you guys made some investments at the Riverville mill in Virginia. At least from a planned budgeting standpoint on the CapEx side, Larry, is that — can you give us a ballpark of that maybe it’s in that 160 range or something like that, were you expecting to be down from where we are this year, or are you seeing enough opportunities in the pipeline organically where you might have $180 million to $200 million of CapEx next year?
Larry Hilsheimer: I think the levels we’ve been running the last couple of years or something, I would continue to model in. I think we’ve got opportunities, including our whole effort around digitization. I mean, we believe that there’s going to be substantive returns from us digitizing more and becoming much more customer friendly. So we’ve got the opportunity to deploy capital in areas that we believe will return well for us. So I think that level is good for your modeling purposes.
Operator: [Operator Instructions] Our next question is a follow-up from Michael E. Hoffman of Stifel.
Michael Hoffman: I just want to make sure I understood the one answer. The unequivocal yes, is the yes, the customers or the competitors are being disciplined or yes, they’re being — they’re acting badly?
Larry Hilsheimer: I don’t know whether you call it acting badly, but are they — I think the question is, are they being super competitive, and the answer is yes.
Michael Hoffman: But not irrational. If they — otherwise…
Larry Hilsheimer: We’ve always got somebody acting irrational somewhere in the world, Michael. I mean when you’ve got as many plants as we do as the number of customers, there’s always going to be something where some lone wolf out there is totally irrational. But as a broad answer across the customer base, no, they’re not being irrational. They’re doing it at prices in some cases that we’re not going to do because we’re not going to chase the volume. Like we’ve said, our focus is on value and delivering the best customer service in the world and being responsive and really treating our customers well and getting paid for the value. As I said earlier, we don’t need to chase volume.
Michael Hoffman: No, I applaud the action. I’ve seen it across other industries. And when you do that, you get the kind of results you’re producing. But the other read through to this is the moment volume starts to improve, they back right off of that, so there’s a snap around price as potential.
Larry Hilsheimer: We would love to see that.
Operator: And I’m seeing no further questions in the queue. I would now like to turn the conference back to Matt Leahy for closing remarks.
Matt Leahy: Thank you, everyone, for joining today. I hope you have a wonderful day.
Operator: This concludes today’s conference call. Thank you all for participating. You may now disconnect, and have a pleasant day.
