Dan Batrack: Well, when we — after RPS, one of the premises we had when we had RPS joined us, and yes, it was our largest acquisition, yes, it was 5,000 people, and yes, it expanded our U.K. and Australia footprints, and yes, it did take our leverage up to just over 2 times, which is right at the upper end of our range. But my discussion with our CFO and treasury staff is, we want to do this but without inhibiting at all Tetra Tech’s long-term plan to add technology experts, companies that can bring us new clients or new areas for growth. So, Steve Burdick, this is great. It’s going to be great for operations. But you have got to keep that channel open and that was part of what drove the convert — convertible debt that we put in place.
I expect that you will see continued more of what we have done for years and years and years, which are small, we call them tuck-ins, some of the scaling bolt-ons, which has just sort of assimilate them into the company. They come in as equal partners with the corporation. They are super important for us. They lead the technical areas for all of Tetra Tech. So if you are out there in firm that’s looking to think about is it a good fit for Tetra Tech. You don’t come to a Tetra Tech to work for us. You come to Tetra Tech to lead us all and so those will continue to take place. And if, I know Steve presented on the slide and prepared remarks that we have $800 million of existing today capacity, which would be more than enough to do what we just transacted with RPS.
But that’s just what’s available today. We have access to over $2 billion in direct line of sight funding that we could trigger within, frankly, within a few phone calls. So if there are opportunistic entities that would make sense for Tetra Tech, our capital structure is not such that our balance sheet would be an inhibitor, in fact, as an enabler. So I would just say that we expect business as usual with respect to adding companies that bring in new technologies, access to new clients or round out some of the geography we have within Australia, Canada, the U.K. portions of Europe and the U.S. But if the right company comes on — comes along, that actually makes sense and that will make us better than we are today both for today and the long-term, we do not bet on companies coming here to make us better than 10 years from now.
We know that will be the case if they come with us, but we wanted to actually show it and demonstrate it to our shareholders today and I know we have used that they will be GAAP accretive on year one. That’s still our goal for the small tuck-ins. I do know like RPS, some of that are much larger and much more complicated. We may have a quarter or two to — that they will be cash accretive, but it may take a quarter or two for the GAAP portion. So expect more and more of the same. We will continue to move forward with the companies that fit with us. That should not be a surprise and that isn’t even felt we are below the midpoint. As Steve had indicated, we are below the midpoint of the range that we would like to reside in between 1 time and 2 times.
We are below 1.5 times, 1.4 times if we don’t do an acquisition in the next six weeks, that ratios continue to get favorable during this year.
Michael Dudas: Seems like your business development team will be busy. Dan, I appreciate your thoughts. Thank you.
Dan Batrack: Hey. Thank you very much, Michael.
Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Batrack for any final comments.
Dan Batrack: Well, thank you very much, Melissa. I appreciate you are moderating the call today. And I’d like to thank everyone who’s followed the company been supportive of us during fiscal year 2023. I think we are off to a bright start to 2024. I am really looking forward to talking to you in about 90 days from now on our next quarterly call to tell you how we have started off in the first quarter. And with that, I hope you enjoy not only today, the rest of this week, but I hope you have a safe and enjoyable holiday season. Thank you very much.
Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.
