James Carbonara : Thank you. Yes, 18 counts a few payments on email. I’ll go through them. Now hopefully, they’re not duplicative of what we just heard. But if they are certainly feel free to note that. The first one that came in as you close on the nursing business and C suite and late 2022, are they meeting your expectations? Would you be willing to buy them at the same price you paid? And why?
J.T. Fitzgerald: Yeah, I think we said in the call, you know, they’re certainly meeting our early expectations, right there off to a good start and obviously transition is always challenging, right, but you bring them into the family. And Charles has done a great job. Stepping into the CEO role moved out to LA and is getting up to speed in a new industry for him right and transitioning out the former owner operator. Would we want to buy them again? Absolutely. Right. I think that they’re very attractive businesses. And as I described, in my answer to Adam, in industries that have what we believe, like really nice secular long-term, growth trends based on imbalanced between supply and demand. And so I definitely think, use whatever reference you want or wind at our back, swimming downstream, whatever it is, I think that we’re well positioned.
We buy great businesses with opportunities to grow and professionalize. And great operators there that have really aligned incentives. And so yes, we would absolutely do those acquisitions again.
James Carbonara: And then the next one relates to the last question is, how many searchers would you like to have available as we move forward? And are potential searchers still interested in working at Kingsway?
J.T. Fitzgerald: Like I said, I think it really is a function of how many we that we think that we can do a great job of supporting and helping be successful in their entrepreneurial endeavor. I think given our lean holding company staff and our desire to stay lean, we can certainly support four or five searchers at any given time, maybe more. But the goal would be, rather than having more and more searchers, would be to accelerate the cycle time from coming on board to getting an acquisition done. And I think there are things that we can do to speed up that process. And so that’s what we’re working on. And are they still attracted? I mean, I think so we talked to a lot of candidates, and we’ve got several that we’re currently talking to.
And I think that as this gets momentum, it has a really nice feedback loop. And so not only do they see the success, for instance, the sale of PWSC with Tyler, that was a great demonstration of what can happen in the model. They see the success of Timmy and now Charles, buying businesses and stepping into the CEO role. And then so the great feedback loop there, and then also with the expanding networks of our OIRs and CEOs, and the people in their spheres, who learn about it through them and come to us, as opposed to us reaching out to them. And then I would just sort of add to that the advisory board and the quality and talent of the two people that have chosen to in agreed to help us out with this. I think is just a really incredible asset.
And people are really attracted to the idea that they will get sort of operational coaching from Tom Joyce, and capital allocation coaching from Will Thorndike. So, yes, I think absolutely not only is it still attractive, I think it’s getting more attractive every day.
James Carbonara: There’s two more remaining from the email. The first one is, is the rise in interest rates having any impact on the pricing of deals you are now reviewing about the availability of credit?
J.T. Fitzgerald: The lower end of the lower middle market, the deal multiples and where we play probably not impacted as much by sort of availability of credit. Obviously, cost of capital will change valuations a bit. And maybe there’s a little bit of a sorting out as sellers have to readjust their expectations at the business, their business may not be worth the same multiple of cash flow as they thought it was. But I think anything that I could say to that would be just sort of based on my own limited data set. But I would say not really but you have to expect that it might a little. And then in terms of the availability of capital. I haven’t seen that. Obviously, the cost of capital sort of debt capital is higher. But it hasn’t impacted the availability of capital, especially not the types of lending structures that we’re using, which is traditional kind of straight amortizing bank that at low leverage ratios.
James Carbonara : Great. And then finally, can you talk about the costs and advantages of obtaining the $10 million loan from CIBC?
John Fitzgerald: Yeah, so the cost, there’s a small commitment fee to have that there. I think —
James Carbonara : We paid $25,000 at close, and then any future draw would be 75 basis points of that draw? Yeah, so it’s a small cost, I think to have some nice drop dry powder.
John Fitzgerald: Yeah. And so the benefit of that is, you know, we’re going to use up a lot of our cash that we have at the holding company here pretty shortly to repurchase our trust preferred current on the first interest on the sixth tranche, and potentially redeem some of the non-converting preferred. We thought it would be prudent to have a standby facility to provide us additional dry powder if we had an acquisition to do in the not-too-distant future.
James Carbonara : Great. So that was the last email question. I’ll pass it back to you JT for any closing comments.
J.T. Fitzgerald: Okay. Well, thank you everyone for your participation. This concludes our 2022 earnings call. Thank you.
Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
