Api Group at J.P. Morgan Industrials Conference: Strategic Growth and M&A Focus

On Wednesday, 12 March 2025, Api Group Corp (NYSE: APG) presented a robust outlook at the J.P. Morgan Industrials Conference 2025. CEO Russ Becker highlighted both the company’s strengths and challenges, emphasizing organic growth and strategic acquisitions. Despite a positive revenue trajectory, the company remains vigilant about economic factors impacting its business.

Key Takeaways

• APG’s revenue derives 54% from inspection services and monitoring, with organic growth up 9% year-over-year.
• The company is integrating Chubb, aiming for $125 million in synergies, with $90 million already realized.
• APG is pursuing $250 million in M&A this year to enhance its geographic footprint.
• The company is actively buying back shares, viewing its stock as undervalued.
• Leadership development is a core focus, with significant investment in training programs.

Financial Results

• Revenue Composition: 54% from inspection services and monitoring.
• Backlog Growth: Organic backlog up 9% year-over-year.
• Synergy Targets: $125 million from Chubb acquisition, with $90 million achieved.
• M&A Spending: $250 million targeted for this year, matching last year’s spending.
• Free Cash Flow: Target set at 75% for the year.

Operational Updates

• Inspection Business Growth: Double-digit growth every quarter since the pandemic.
• International Expansion: Implementing a "sell inspection first" strategy internationally.
• Chubb Integration: Consolidating monitoring centers and integrating Benelux operations.
• Tariff Management: Monitoring tariffs and hot rolled coil prices to protect the installation business.
• Leadership Development: Institutionalizing leadership through "Leader Labs" and online programs.

Future Outlook

• Investor Day Plans: New margin targets to be announced in May, focusing on expansion.
• Margin Expansion Strategy: Emphasizing price, inspection service growth, and project selection.
• Field Service Module: Developing enhancements to boost field productivity.
• M&A Strategy: "Walk before we run" approach in elevator maintenance, exploring international opportunities.
• Buyback Activity: Ongoing share repurchases due to perceived undervaluation.

Q&A Highlights

• Economic Sensitivity: Monitoring tariffs, with resilience in data centers and semiconductors.
• Share Gains: Capturing market share from small family-owned businesses.
• National Accounts: Developing a National Services Group to support branches.
• Software Platform: Utilizing Techno software for operations.

In conclusion, APG’s strategic focus on growth and efficiency positions it well for the future. For more details, refer to the full transcript below.

Full transcript - J.P. Morgan Industrials Conference 2025:

Steve, Host, APG: All right. We’re going to move on with Russ Becker from APG. Thanks guys for CEO of APG. And we usually just start this off with a bit of a State of the Union, what you’re seeing out there and your business, what you think is most important longer term, and then we’ll get into the Q and A.

Russ Becker, CEO, APG: Great. Is this on?

Steve, Host, APG: It is. Yes.

Russ Becker, CEO, APG: Good morning, everybody. Thank you for taking the time to join us and thank you for your interest in the company. State of the state, feel really good moving into 2025. I feel like our business is really well positioned. 54% of our revenue is coming from inspection service and monitoring.

So we feel like we continue to grow the recurring component of the company. Our backlog is at all time highs. I think organic basis, we’re up 9% on a year on year basis. So as we move into 2025, we feel really good about where we’re at. We feel good about the end markets that we serve.

And for us, it’s just a lot of blocking and tackling and continuing to move forward with our bolt on M and A strategy and the work that we’re doing. So good we’re in a good spot.

Steve, Host, APG: Can we just delve into the safety business? You guys have done a great job of transitioning the portfolio over time. Talk about the various business models there and what you’re seeing in each of those, whether it’s the really recurring inspection, some of the upgrade work you do, obviously new construction is less important, but just talk about how that business model works over time.

Russ Becker, CEO, APG: Well, I think the biggest differentiator for us in that space is the focus that we have on growing the inspections. And for those of you that are newer to the story, this building is not really fair comparison because it’s pretty damn nice, but it’s pretty big. But typical

Steve, Host, APG: Should see the one next door.

Russ Becker, CEO, APG: Yes. I’m looking forward to seeing it actually. Maybe one day we’ll graduate to that building.

Steve, Host, APG: I’m hoping to graduate to that building as well at some point.

Russ Becker, CEO, APG: But, you know, like a typical commercial real estate or office building has a fire protection system in it. And there’s two components to that fire protection system, the sprinkler system and the fire alarm system. And those systems are required by law to be inspected for functionality and operability, at least once a year. Most of the time, it’s twice a year or even quarterly. And so the biggest thing for us is we are growing the inspection side of our business.

So like we’re out building a sales force that’s calling on the already built environment and selling inspections to building owners and property managers. And the reason that we do that is that we’ve got data that shows that we’re going to generate some place between $2 and $3 or $3 and $4 worth of service work on an annualized basis for every dollar of inspection work that we do. So the one of the biggest bellwethers for us is double digit inspection growth. We’ve grown our inspection business in The U. S.

At a double digit clip every quarter since the pandemic. And we continue to build out our sales force so that we’re able to do that. And we’re kind of in flight of bringing that service first, inspection first mindset to our international business that didn’t have that when we acquired the business three years ago.

Steve, Host, APG: Can you talk about the how you can carry that across the pond? What’s different? What your experience of the last year and change is kind of telling you the challenges and the opportunities on that front?

Russ Becker, CEO, APG: Well, internationally, I think one of the biggest differences for us is that, that business kind of if you look at it in the buckets that it falls in, a third of our revenue comes from security, a third of our revenue comes from fire alarm, very little of that is really sprinkler, and then a third of it comes from fire extinguisher. And kind of the rules are different, if you will. And so what we’re doing though is so like security as an example, that is not statutorily required to have those systems inspected. Obviously, if you have CCTV or camera systems and card access systems and they don’t work, you’re going to fix them. But there’s no statutory requirement that they have to be inspected.

And so that’s a difference. But what we are doing is bringing that kind of sell that first mindset. So they used to capture service work in the more traditional sense, like some of our peers did in The U. S. Where they would go sell the new installation project.

And then when the installation project was coming to a close, they would turn around and try to sell the service work. And we’re building out a sales team there as well that’s selling service to the already built environment. So it’s a little bit nuance, but it’s really very, very similar.

Steve, Host, APG: Right, right. And so if you get out in front of that and you approach it the way you’re approaching it, that’s kind of like better for everybody. 100%. Big improvement for the business.

Russ Becker, CEO, APG: 100%. And we brought in a new sales leader in our international business. He is doing a fantastic job. He is really competitive. And he has brought just a whole new mindset to that sales team.

And we’ve had some turnover and some change with those folks as he’s brought in a different element of accountability to the group. It’s been really refreshing. He’s done a really good job.

Steve, Host, APG: So stepping back to The U. S. Business, you guys talk about a growth rate mid to high single digits on that on The U. S. Safety side.

We’re trying to figure out what’s going on in the economy. You guys are not that economically sensitive. But in that business, kind of where would you see if you were to see some pullback at all at your customers, where would you see that? And what are you seeing today? What are you watching for with all this uncertainty?

Obviously, you’re way more insulated with your inspection and services side, but

Russ Becker, CEO, APG: Well, I mean, I think for us right now, we’re just seeing more noise than anything. And we’re clearly watching tariffs and what the impact that the tariffs could potentially have. So like for us, the biggest commodity that we buy is pipe. And so we’re obviously watching hot rolled coil prices. We’re pretty protected.

When President Trump won the election, we knew that tariffs would be one of his hammers, if you will, that he would utilize. And so we were very proactive in making sure that on the installation side of our business, we were protecting ourselves. You also have to remember the average project size for us is very small, and typically are quick hitting. So the exposure that we have there is not super high. But we want to make sure that we continue to stay out in front of it.

For us, I think, Steve, a big part of it is end markets and the end markets we serve continue to show positive resilience and the demand is really high, whether that’s data centers, semiconductors, for the most part, advanced manufacturing. So we feel really good about kind of where the business is sitting today and the resiliency that we have to kind of operate through all this noise. I was at this CEO breakfast and they were talking about the volatility in, like, the economy and leading through that. And I was like, this is just like every day. Like, you just need to be kind of agile and open minded and know that this is the world that we live in today.

And I think I feel like our business leaders are prepared to lead their businesses through that.

Steve, Host, APG: Maybe talk about that growth algorithm and how that gets built up when it comes to I mean, price is such a tough thing to calculate for you guys because it’s labor hours, right? Maybe just talk about the how you discern the rate of volume activity and then what how that kind of translates into your actual revenue growth? How much is coming from an actual volume of activity versus maybe a price or a value?

Russ Becker, CEO, APG: Well, when you look at again, let’s maybe talk specifically about The U. S, the expectations are very similar for our international business. But we’ve guided our businesses to high single digit growth in the inspection and service side and low single digit growth in the installation part of the business. And that kind of gets you that mid single digit range. And we continue to grow the inspections at a double digit clip.

And that is almost all share. So you’re taking we build price increases into our proposals and into our agreements. But for the most part, that’s you’re taking share there. And that’s the I think one of the biggest advantages for us and really the way that we continue to build resilience into the business model is like those buildings exist. They’re not going away regardless of what happens to the economy, and that’s why that’s what gives us confidence that we’re going to be able to continue to grow the business organically.

Steve, Host, APG: Who are you taking share with and who are you taking share from? Is there a flavor to that, that’s consistent across those? Because that’s obviously a lot of share gains. Yes. So Because the market is probably growing what, low to mid?

Russ Becker, CEO, APG: Yes. I would say low single digits. Yes. Yes. But the thing the beautiful thing about like, especially on the fire side of the business is that, I hate to say this, but when there’s actually a catastrophe, it drives code change and increased codes is actually quite beneficial for our business.

So that’s on the side.

Steve, Host, APG: In general And that would be a market driver.

Russ Becker, CEO, APG: That’s a market driver, for sure. But in general, we’re taking that share from small family owned businesses. And even though you’ve seen the kind of the over the last, I don’t know if you want to call it five years, ten years, whatever, you’ve seen a lot more private equity interest in especially in the fire space. Still the lion’s share of our competitors are small family owned businesses on a kind of city by city location basis. And that’s who we’re competing with.

And they’re I don’t want to take anything away from them because that’s like the core to our bolt on M and A strategy. And these are really good people, good hardworking people. But typically, they have less resources, so they’re less sophisticated. It’s easier like your average inspection is probably less than $1,000 And so for these family owned businesses, it’s a lot easier for them to go out and win a $500,000 installation job or retrofit job than it is to build up that same revenue base $1,000 at a time. And so they don’t have the infrastructure and they don’t have the resource and they don’t have the people.

And a lot of times, they’re doing it just because they did the original install or something like that. And that’s who we’re taking that share from in general.

Steve, Host, APG: And is there any particular customer that they may own a few buildings and you’re doing one building, now you’re doing two. I mean, is or is it still the customer base obviously is fragmented, but is there a flavor for the customer that is that you resonate more with? Not really.

Russ Becker, CEO, APG: I would say not really. I mean, again, we’re going to be more focused on the right end markets. That strip mall that has a Starbucks in it is probably not going to be the place that we’re going to do so well with. And the more sophisticated, the more complex those types of customers, we’re going to clearly do better at just because we bring more expertise to the table. But no, not really.

Steve, Host, APG: And I guess is there a national account element any of this? I mean, I think it’s pretty local, right?

Russ Becker, CEO, APG: So there is so we have a business inside of API that we call National Services Group, and it is basically a sales engine to sell national accounts for our individual branches then to turn around and service. So we do have an engine inside API that’s attempting to sell accounts on a national basis and a regional basis.

Steve, Host, APG: Just turning to back to international and Chubb, maybe just talk about more of the integration there and where are you from that perspective? I think you’re pretty much at the end of the plan period. Is there more to go there? Or are we now, from an operating perspective, a pretty solid run rate on margins?

Russ Becker, CEO, APG: Well, the margins are going to continue to improve there.

Steve, Host, APG: Right.

Russ Becker, CEO, APG: And so we’re not going

Steve, Host, APG: to I guess the integration phase, the integration phase.

Russ Becker, CEO, APG: Yes. So there’s kind of two there’s we have more work to do, all right? So we identified roughly $125,000,000 of basically synergies because for the most part, that’s we’re taking cost out of the business. I think through the end of the year, we’re at $90,000,000 so we’ve got $35,000,000 to go, of which the lion’s share of that will come through 2025 with a little bit of it moving into ’twenty six. But the way I would tell you so and there’s some significant integration work, like we’re consolidating our monitoring center footprints and that work is ongoing.

We’re integrating our Benelux business. If you recall, we had bought SK Fire Safety before Chubb, and so there’s a significant integration going on there. Our business leader there, his name is Focal De Vries, is doing a fantastic, fantastic job. But the way I’m looking at it, Steve, is like it’s business as usual. And we still have stuff that we’re doing that we’re going to continue to do, but like my brain has kind of switched to like business as usual.

We’ve opened the aperture up as it relates to bolt on M and A. So we’re looking at some things now internationally. We feel like the business probably won’t go do something in Benelux just because of that integration work that’s going on, but would we do something in The UK? One Hundred Percent. And so you’re seeing us open up the aperture because we feel like we’re in a much, much better place.

And to be honest with you, I just really couldn’t be happier with where that business has come in the three years that we’ve owned it.

Steve, Host, APG: And what’s the ultimately, what’s the long term growth rate you see for Chubb? Is it I would assume it’s a little less than The U. S. Than you target in The U. S?

Or you think you can

Russ Becker, CEO, APG: Fleet average, we expect that business to grow organically mid single digits. We guided that business the exact same way we guided our North American safety business, high single digits on inspection and service and low single digits on project work. And I would tell you that when we rolled up our plans, that’s what we saw.

Steve, Host, APG: It’s amazing what can be done with a kind of a corporate orphan that doesn’t get the real attention that it needs. That business didn’t grow for fifteen years.

Russ Becker, CEO, APG: Flat to declining. Yes. And I would say that, I think being like knowing that, like, we actually want to own them actually matters. Like we didn’t own that business. Like I remember myself and three of my colleagues spent the first when the deal closed, we spent about ten days over in The UK and moving around The UK and Western Europe and visiting a bunch of our branches.

I would tell you, two days in, I had seen more branches and more of the business than the previous leader of the company, much less the CEO or Carrier at the time. I mean, like, we just that’s the way we operate. Right. And I think we were on day two, and one of my colleagues was asked, when are you going to sell us? And it was like, yeah, we’re not.

You know, like, we’re actually excited to own you. And And for those of you that don’t know the company very well, but our enduring purpose as a company is building great leaders. And if you think about it in the context of you’ve got 500 branches internationally, and every one of those branches needs to have a great leader in order for you to win in that market. And then each of those companies needs to have a great leader. I mean, if you just think about it in the context of a people centered business, investing in people as leaders and as human beings is actually matters in our case.

And when we bought Chubb, we very quickly recognized that there was a void in their culture that wasn’t good or bad. It didn’t exist. And we were able to insert ourselves and bring the leader development programs that we had built over time in North America, and very quickly, we had some translation and things like that that we had to address. But we were able very quickly to start to bring those opportunities to that team, and it took off like wildfire. And so not only was it orphaned, but it was like not invested in.

Like these people had no idea what it was like for somebody to say, like, yeah, I actually care about you and I care about your growth as a human being. That matters, and especially in a people centered business. And, like, we have a leader lab going on right now in Rotterdam. You know? I’m I was actually gonna go, but I came here, Steve.

So Appreciate that. Oh, actually, I was gonna go. So

Steve, Host, APG: What maybe just one other way how that gets institutionalized into the culture. So just kind of hammer home the point of the things you do to differentiate on that leadership development front, another example of what you guys do to make it more institutional?

Russ Becker, CEO, APG: Like we don’t have enough time. And probably, I mean, like, so these Leader Labs I mentioned, like we started having Leader Labs for the first time, I think, in 02/2003. We have one every spring, one every fall. We do spring and fall in The U. S, spring and fall now in Western Europe, spring and fall in Asia Pacific.

And in North America, I’ve never missed one. And it’s and I left early from one and I regret it to this day. And it’s 100% leader developed, no spreadsheets, no business. And it’s like, you’re showing up, and we’re gonna take the time to invest in you as a leader and as a human being. And, and people know, like, I I’m not a facilitator.

I’m a participant. And so people know how important this is to me and then ultimately to the institution, and it really, really matters. One of the things that is really interesting, and we’d be more than willing to share this with anybody in this room, but we have a saying at API, everyone, everywhere is a leader. And so we encourage every single one of our team members to believe in their brain, in their mind and to invest in themselves that they are actually a leader. And so if you’re going to do something like that and say something like that, then you have to give people the opportunity to opt in to grow and develop as a leader.

So we, created an online learning opportunity. It’s thirty minutes long, and it’s called I am a leader. And we have three pillars of leadership at API, leading self, leading others, and then leading teams and businesses. And so this I am a leader learning opportunity is centered on leading self. And we all can do a better job of, you know, leading selves and improving ourselves and being a being a better version of ourselves, right?

And I think we’ve had 7,000 of our team members in The U. S. Opt in to participating, and we’ve had 7,000 internationally opt in. But here’s the interesting part about internationally. It probably took us five or six years to get to, say, 5,000 in North America.

It took us six months to get to 5,000 internationally. So I share that because it just gives you a glimpse of like how these people were

Steve, Host, APG: Yes. And they buy in and you also are probably better at

Russ Becker, CEO, APG: 100%

Steve, Host, APG: scaling it.

Russ Becker, CEO, APG: 100%. But, and I’m serious, like reach out to Adam. We can share a link with you. If you want to steal it, you’re welcome to steal it. You can put JPMorgan on it instead of API.

But I’m a big believer that a rising tide floats all boats. And if we can help your organization be better, then we’re helping in general, we’re helping our communities and our societies as a whole.

Steve, Host, APG: I manage like four people. So I don’t know.

Russ Becker, CEO, APG: I don’t know.

Steve, Host, APG: Shaundry, what do you say? I want to get Shaundry going. So just back to the business on the specialty side, a significantly smaller piece of the portfolio than it’s been. What are you guys seeing there? And maybe just talk about the visibility you have on the pickup that you’ve embedded in your guidance for this year?

Russ Becker, CEO, APG: Well, we yes, we feel I mean, we feel good about where the business is at. I mean, as we move into 2025, their backlog is up organically, what? Double digits. Double digits. So I mean, their backlog is in a really good place.

We feel like the really disciplined customer pruning and customer selection that we went through last year and then some of the project delays are behind us. We also think we’ve learned a little bit as it relates to some of the programs that we’ve taken on. So I feel like that business is in a really good place to have good organic growth in 2025, just like the rest of our business.

Steve, Host, APG: And then just the margins. So you guys are clearly delivered on what you said you were going to deliver on margins. What’s the philosophy on the next step? Is it going to be another kind of three year target at some point at your Investor Day? Or how are you going to approach this?

Will it be an incremental margin algorithm? What’s the approach to margins thinking a bit more longer, just a framework wise?

Russ Becker, CEO, APG: Well, I’ll let Adam, because he’s really organizing the Investor Day and everything else. But we’ve been working on some of our long range planning, probably going back twelve months ago. And as we started to think about like what is the next iteration of API look like, so we plan to share kind of our next targets at our Investor Day in May. And they definitely will be higher, and we will continue to expand our margins and drive increased growth in the business. As it relates to like the levers, it’s really a lot of the same, Steve.

And I mean, like I’ve been sharing a little bit, like if you look at like our North American business, North American safety business specifically, and that branch operating model, right? So like if you said that we have a bunch of branches and they sit in a cluster like this, and the average is right around 15% or 15% plus from a margin perspective, we need to take that whole cluster, right, from 15% to 17% or higher.

Steve, Host, APG: You know

Russ Becker, CEO, APG: what I mean? But I’m just saying, and we need to tighten the cluster you know, instead of having and it’s pretty tight now in North America. Whereas if you, like, look at our international business, the cluster is probably a little looser just because we haven’t owned it as long. And we need to tighten it. And we need to take that from, say, ’thirteen, ’fourteen to the ’fifteen, ’sixteen, ’seventeen, just like we’re going to take our North American business.

And so but the things that we need to do in those branches are really the same. It’s price, it’s growing the inspection service and monitoring, it’s being disciplined on customer selection and project selection. It’s over here having procurement support that work. And I would say that we actually had a question from one of our investors this morning was around like do you have any major projects. So kind of in the same vein as your question.

And the answer is yes, we do have some platform like we need the next iteration of our field service module, you know what I mean, so that we can continue to provide a more productive, easier work environment for our field leaders, right? The more efficient that we can make them, the more they’re going to enjoy their job, the better job they’re going to do servicing our customers. It all kind of works hand in hand.

Steve, Host, APG: That software, that’s

Adam, Unidentified speaker: most of the Yes,

Russ Becker, CEO, APG: it’s Techno. And we have we’re obviously operating on a platform right now, but it’s like what’s next and what’s the next iteration of that. And that’s kind of just normal evolution the way I’m looking at it.

Steve, Host, APG: Is it are there are branch closures a part of this? I mean, given you’re so local and you want your services top notch, it seem that that wouldn’t be a significant part, but like how much of a role the branch closures play?

Russ Becker, CEO, APG: There so probably more probably very little in the international, but there would be more potential for branch closures internationally. We did close a branch in The US this year. And, you know One branch? One branch.

Steve, Host, APG: So the branch closure really isn’t

Russ Becker, CEO, APG: a big part of it. No, it’s not. But like, I mean, if people think that we’re not going to prune there as well, we’re going to prune there. If like, so like when you look at these our operating model, this branch led operating model, like, you know, you can hand the best person, like, here’s the recipe book, here’s the playbook. But if you’re average at best, we’re still going to get average results.

Right. So you still have to start with, do I have the best damn leader in that branch, yes or no? And when you have a really good leader in that branch and you hand them the playbook, that’s when things really will take off. And Adam’s got his one in his investor deck or one of his investor decks. He’s got probably 74 of them out there.

There’s a slide in there that shows an evolution of a branch, and you should check it out. And because that’s possible, what happened in that branch is possible in every single branch that we have, but it starts with the right branch leader, and then it’s sell inspections first and then all the other stuff. And I think one of the things that is a little bit can be even confusing to some of our field leaders is we talked about this inspection first mindset inspection and service and everything else. They think that we’re going to get out of the installation, the installation part of it. And really, what we want to do is just shrink that component of it.

But what happens when you have a really robust inspection and service and monitoring business in your branch, it allows you to be even more selective on the project work that you do and your gross margins skyrocket. And that’s a beautiful thing that’s a beautiful place to be. Right.

Steve, Host, APG: On the M and A front before we get to the audience, just talk about a bit about the pipeline you guys talked about on the earnings call and then elevated and what your intentions are in elevator maintenance?

Russ Becker, CEO, APG: So I’ll maybe hit elevators first. So we entered the elevator space last year, halfway about halfway through the year. We’re very excited. The reason that we really like the elevator escalator space is the statutory nature of that business as well. It’s very similar to the Fire Life Safety business.

Elevator is roughly a $200,000,000 business, so it’s not a huge business. We think that there’s a $1,000,000,000 platform opportunity for us. As it relates to M and A, we are going to walk before we run. And what I mean by that is that we’re going to buy a company and kind of gauge how they do from an integration perspective. And really, we haven’t done any bolt on M and A inside the business.

So the reality of it is, I don’t know. Like, we have a team at API that’s led by a woman by the name of Anna, but she’s really the quarterback. She’s really the business has to own the integration. And I want to make sure that we do a really good job of integrating the first one. When that gets done and that goes well, then we’ll go do the next one.

So I’m taking a walk before we run approach. Nobody should read anything more into it than just like let’s make sure that we don’t screw it up by doing too much too fast and being very disciplined as we approach it. But I

Steve, Host, APG: guess it’s elevator maintenance. That sounds like it’s a big focus now.

Russ Becker, CEO, APG: Oh, yeah, for sure.

Steve, Host, APG: Okay. Any questions out there? And in the core business, what are you focused on from an M and A perspective in the other parts of business or where that’s more of a margin story?

Russ Becker, CEO, APG: So I’d say in our core business, I mean, we spent roughly $250,000,000 on M and A last year. In general, if you look at it, our average multiple on our bolt on M and A is less than six times. And if you’re paying less than six times, in general, for every dollar of purchase price you get, you’re going to get roughly $1 of revenue. That’s just the way the math works when you’re paying reasonable multiples for these businesses. And our goal would be to do another two fifty this year, another two fifty the next year and continue to build out our geographic footprint.

I would say the only I don’t know if it’s significant difference, but the only difference would be the fact that we’ve actually opened the aperture up to our international business, as I mentioned earlier. And so we’re looking at some opportunities there. We did one small one last year in Australia, And we’ve got a few things that we’re looking at now that would be complementary to our international business just in general. So we’re being smart about it, but we have opened our eyes and opened the field up a little bit.

Steve, Host, APG: And then just one last one on free cash flow. You guys have done a good job of generating cash. What’s the outlook there? Any moving parts on cash flow we have to be that are notable here this year, next year?

Adam, Unidentified speaker: No, nothing notable. Our target for this year is 75%, which is in line with our increased target for last year. We think there’s a working capital opportunity that we’ll continue to attack. So we feel like we can stay kind of in line with where we generated last year while returning to more normalized organic growth levels by going after working capital this year.

Steve, Host, APG: And then lastly, just on like buyback, is that any consideration of a buyback if some of these deals don’t come your way? Multiples maybe just a little bit too high for you. I mean, you guys definitely don’t pay a lot for these companies, but on the elevator side, maybe they’re a bit higher. What’s the view on buyback? Yes.

So we’ve been actually active in

Russ Becker, CEO, APG: the market buying back some shares recently. And so I think we’ve been pretty open that, number one, we’re going to pay down debt, reduce our leverage. We obviously are inside our target, so don’t get to use that excuse anymore. And second would be, I’d rather do M and A with our excess cash, but then buybacks would be third, but we feel like our share price is undervalued. And we like the leadership team of the company.

And so we don’t have to do a lot of diligence on the business. So we’ve actually been active. We think our shares are undervalued. And so we’ve actually been actively buying back some shares recently.

Steve, Host, APG: Interesting. Okay. Anything else?

Russ Becker, CEO, APG: All

Steve, Host, APG: right. We’re good. All right. Thank you. Thanks, Steve.

Really appreciate

Russ Becker, CEO, APG: it.

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