Jim, and as a result, the implications for us and what the back-half of the year looks like and what the organic trajectory looks like is real, it’s material. And that has changed our optimism, not just for this year, but as we look out through the course of the next few years. And so, that’s one variable that moved from when we initially provided guidance and certainly has moved since we talked with you through the end of last year and early part of this year. The other dynamic that we are weighing, and it’s certainly going to continue to be a theme we have to articulate as we think about quarterly performance, not annual, is the impact of Matrix. So, you’re exactly right. That’s a business that is very different in terms of its revenue and EBITDA weighting first-half of the year versus second-half of the year.
And as a result, we wanted to give you guys more color on that. And then, the third dynamic is the impact both of recent acquisitions and the transition away from the large train derailment emergency response last year. So that’s because there were so many confounding variables, we wanted to make sure we were very open about what’s driving the business. But fundamentally, the increase in guidance was because the structural underpinnings of the business look really solid for us, and we’re really optimistic about what the next couple of quarters, next couple of years looks like. Does that make sense?
Jim Ricchiuti: It does, Vijay, thank you. That’s helpful. And just a final follow-up question for me is, you’re talking about a growing funnel, M&A. Obviously there was the additional capital that you’ve added back in April. And maybe if you could, two things, historically, you guys have done more smaller deals than a few bigger ones. But I’m just wondering how we should think about M&A activity and whether you guys have to add some additional resources or if you feel you have the infrastructure in place to accommodate a pickup in M&A. Thanks.
Vijay Manthripragada: We are comfortable with our resources that we have in place now, Jim, to accomplish what we’ve set up for this year. And you’re exactly right. If you go back, if you think about our historical cadence of around $10 million of EBITDA and our target of businesses that are a couple million dollars of EBITDA each that we’re purchasing at very attractive multiples, that would suggest just round numbers, call it a handful, five-ish deals a year. And if you look over the last couple of years, we’ve done more sizable ones like a Matrix, but the cadence has been a little smaller, a little lighter because we’ve been a little bit more cautious with capital allocation. What we’re finding now is that the pipeline never went away and the backlog is quite robust in terms of the opportunities set for us.
And you can see that already, right, Jim, through the first quarter we’ve – or call it the first four months, we’ve already closed three transactions and there’s more on the comments. As a result, the cadence is higher. So, we wanted to make sure not only is the balance sheet going to be able to absorb that because these are very strategic and very attractive transactions for our long-term growth plans, but that our team is able to do it too. So, there’s nothing large that’s imminent. There’s no changes to our strategy. There’s no additional resources needed. This is more of the same, except the cadence is higher than it’s been in the past.
Jim Ricchiuti: Got it. Thanks very much.
Vijay Manthripragada: Thanks, Jim.
Operator: Thank you. Your next question is from Brian Butler from Stifel. Please ask your question.
Brian Butler: Good morning. Thanks for taking my question.
Vijay Manthripragada: Hey, Brian.
Allan Dicks: Hey, Brian.
Brian Butler: Just you kind of touched on the M&A question, the last M&A question, but maybe a little bit more color on what you’re looking for service-wise across the segments and just help understand where those opportunities might lie?
Vijay Manthripragada: Yes. Brian, if you step back and think about where our transaction, ideas or leads come from, these are word of mouth either from our clients or from our teams. And so, it’s largely either geographic expansion or the addition of specific service lines that our teams believe will be complementary to what they’re already offering to our clients. And so, using the three from this year, Epic was a continuation of what we already do, a fantastic team, just an expansion geographically, Two Dot was exactly the same. It was a geographic expansion of our current service line. And then, ETA is a small transaction. It was a partner of Montrose’s serving existing clients, and so we just brought that in-house. And so, that is the geographic expansion, I would say, is by and large the primary driver, existing services, no shift to strategy, just bolstering our ability to serve our clients in different places.
The second thing we look for – and look, table stakes is cultural fit, right, and financial accretion, so let’s put that to the side. The other variable that we look at, though to a lesser extent, is an expansion of our technical capability or the acquisition of selected technologies. That has not really been the cause for any of the recent transactions, but that is another area we tend to be focused.
Brian Butler: Okay, that’s helpful. And then, maybe we could just talk on PFAS revenues, where we are right now, and the outlook with the 200 billion total addressable market is huge, but where are we starting? And again, you talked about the ramp already, but just a little color on the starting point.
Vijay Manthripragada: Yes. So, PFAS, it ebbs and flows a little bit, Brian, based on the projects, but to put it in context, it was, call it 15 to 20-ish million of revenue as we approached our IPO and around IPO, and it’s called 75 to a 100 today. And so, we’ve seen a really nice growth trajectory over the last couple of years, and we think that that will be multiples of its size than it is now over the next several years.
Brian Butler: Okay. And may be just one last one —
Vijay Manthripragada: And sorry, Brian, going back to the earlier point that we were making with Tim, this is not just a treatment consideration for us. It impacts all parts of our business in all three segments.
