And of course, there’s tremendous amount of due diligence that goes into every company that we buy including the projections as well as the purchase price. I think what is more important is really looking forward. And as I look at acquisitions looking forward is we’re really going to be focused on companies that have full alignment with our strategic plans that really tie to our core businesses, our core competencies, how can we expand the offering to our customers, how could we expand the region, expand our capacity, our capabilities, but are really tied to our core businesses. And in fact, I’ve already started to go through to our funnel of companies and really looking at the ones that are not core to us are ones that we just — we’re not going to pursue.
So that’s on the strategic side. On the financial filter side, we have specific criteria that would apply to our overall criteria for beating cost of capital was 3 years. And we will stick to those financial criteria and making sure that every acquisition both fits the strategy as well as the financial filters to make sure we will drive value to our shareholders and to our customers while we acquire companies. So you will see that going forward, we will you will not see transformative companies at this magnitude going forward. They’re going to be a lot more close and tied to the core.
Ryan Connors: Got it. Okay. Fair enough. And then my second one, I wanted to go back to the electric transmission discussion there a minute ago. And Obviously, these are very long lead time projects, sometimes years or even a decade or more in planning. So a spike in interest rates is not going to impact your near-term project funnel or 2024. But Obviously, some of the renewable generation utilities have gotten absolutely demolished since this interest rate spike took place and the concern is a slowdown in rate base growth as some of those renewable projects don’t happen. So logically, at some point, that would impact transmission investment, I would assume. So what are your thoughts on that? And what kind of time line that lag effect might be on the transmission business?
Avner Applbaum: It’s actually an interesting question, an interesting dynamic. Actually, what we are seeing that the higher interest rate, the higher inflation, higher cost in general, they’re actually impacting the EPCs and these players in the space. Because if you look at their source of income, actually, now it was impacted by 2 things: one, we actually had a mild summer. So their income was lower. And in fact, some of the rates are fixed over the next several years. So their top line is squeezed or remains the same and their profit actually gets squeezed in some areas. So we are seeing project movements where they’re actually applying their discretion and deciding what project they want to work on now versus delay into the future.
Now thankfully, the demand is so strong. And one of our really strong capabilities is our dynamic and flexible footprint, where we have the ability to pull projects and push projects out and really support our customers as they go through their through their process of planning their orders. So we are seeing a lot of movement to the outside, you won’t see that because we really have great processes and great footprint to address that. So it might be seamless, but there’s a lot of work that goes behind the scenes, where we’re actually able to continue to drive the growth. So we’re really — the demand is going to outpace the supply and therefore, we will continue driving the growth. Now specifically on solar, yes, you are seeing a lot of the players in the space that are definitely impacted by higher interest rates, higher financing.
We are seeing that, but it’s a very high-growth business, and we’re able to continue to grow, and we really play in the DG space, we’re able to get a lot of good momentum. We are globally, so we’re getting benefits from all the regions that we’re currently operating in. So there’s a lot of moving pieces. I’d say in general, the whole economy, you are seeing impacts from interest rates and inflation and labor constraints. But with our competencies, with the strong markets, we’re able to navigate through these times and really drive growth — high growth in [indiscernible] both TDS and solar.
Operator: Our final question is from Brian Wright with ROTH MKM.
Brian Wright: Just wanted to take a little deeper on Ag. The comments on the improved order rates in North America year-over-year, I mean, are you kind of indicating that North American revenues in the fourth quarter should be — should have — should stabilize year-over-year or even be up slightly based on what you’re seeing at least as of right now to start — if we could start with that, and then I’ve got a couple of follow-up from that.
Timothy Francis: This is Tim. I’ll take that question. So North America, frankly, globally for agriculture, it’s a little bit more dynamic than that, right? The backlog, we had such a record backlog the past few years, and we’ve been meaningfully reducing that backlog back down to what has been more like historical norms through 2023. So although we are excited to see the order rates improving, you got to also think about it from the backlog perspective as…
Avner Applbaum: And Brian, I just want to add one more point, right? We’ve already seen throughout this last 12 months that a month is not a trend. And right? And so we are really being very measured. We’re going to really take a close so we’re excited. It’s very nice to see the order rate increase year-over-year that is a very good sign. But again, let’s wait a few more months and see how that all pans out as we kind of continue looking forward. We’re excited. It’s always good to see the order rate going up. But again, it’s been very dynamic. So we’re going to be very cautious about kind of how we look at that business in the short term.
Brian Wright: Okay. And then my follow-up is the indication on the profit level being lower year-over-year. And that’s just a function of typically there’s more of an international just — there’s more of an international mix in the third quarter than there is in the fourth quarter. So the operating profit will be down third quarter to fourth quarter. Was that meant to be a sequential comment? Or was that a year-over-year comment as far as the operating profit? I just want to make sure I got that right.
Timothy Francis: I believe it was more of a year-over-year comment. Going back to [indiscernible]. But yes, it will be down — let me be more definitive. It will be down year-over-year, and it’s due to the higher mix of international project sales this year versus last year.
Brian Wright: Okay. And then one last one, if I could. Just on the international for the fourth quarter in the orders, I know the rainfall has been pretty sparse in [indiscernible] for September and October. So just kind of any kind of order level commentary that we’re seeing early fourth quarter in international?
