Ed Ryan: Yes, it’s an interesting question and you’re right that several deals we’ve done in the past couple of years have done that. I think there was a — you probably heard me talk about it on past calls, a rebalancing going on where everything was selling for high dollar volumes as everyone was booming coming out of the pandemic. When that started to slow down, companies were finding it hard to get people to pay up for acquisitions. An earn-out is one way to bridge that gap. We’ve used it effectively a few of the times. It’s not really our first choice. We’d probably just pay cash for something and own the asset outright. But when there’s a dispute about what the fair price is for something, we’ve used them to get over that hurdle and quite effectively, most of the time or in fact every time, we have an earn-out in a process.
We’re very happy for that acquisition to get the earn-out because that usually means we bought a business that’s doing very well and probably going to do very well for us in the future. So we’ve used this. It’s probably not our first choice, but certainly something we’ve done when we think it’s appropriate.
Paul Treiber: And then shifting to one of your more recent acquisitions, GroundCloud, you mentioned the integration go well and some margin expansion. How do we think about the long-term margin profile at that business? Do you think you can get it up to the company average margin profile?
Ed Ryan: We’ll see. Our hope is to — we bought it much, much lower than that. And our hope is to get it up as close as we can to that. I don’t know if we have our sights set on the company average margin profile right now. But certainly, we’d like to get it up 10, 12 points, which will get it close.
Paul Treiber: That will be great to see. Just a last question just on the M&A environment in general. Your comments about the macro environment expressed a lot of caution. Are you seeing that caution still in the M&A environment in regards to the valuation?
Ed Ryan: I think we’re starting to see it in pricing [ph] in some of the deals we’ve been doing now. We’re getting more deals done now than we were six, eight months ago. So I think it’s starting to settle itself out right now. And we will see what happens in the economy. If the economy gets worse, it’s probably going to get easier for us to get stuff done. If it gets better, people might start saying I want more money for the companies I’m selling. So we’ll have to see what happens. But we like what we see right now and have been able to get what we think are very high quality acquisitions done at a price we think we can make money for our shareholders.
Paul Treiber: Thanks for taking the questions.
Ed Ryan: Thank you, Paul.
Operator: Your next question comes from the line of Justin Long from Stephens. Your line is now open.
Justin Long: Thanks. And I guess to start building on that last question, it sounds like valuations on acquisitions have started to come down and you’ve talked about that the last couple of quarters or so. In terms of just deal activity, have you seen things pick up and maybe could you talk about your confidence in deploying capital in the back half of the year? I know there weren’t any acquisitions in this most recent quarter.
Ed Ryan: Yes, I think that’s right. I think we’re starting to see prices come into what we think is a reasonable range. That’s why we’re able to get acquisitions done. And I think we’re starting to see more stuff for sale. Again, if there was kind of a lag there for six months or so when no one knew what to do, I think it’s starting to open up now. We’re starting to see the type of quality assets that we wanted at prices that we think are fair prices for them. And let’s see what happens. But hopefully that translates to the ability to get more deals done in the future.
