APi Group Corp — Call Transcript 2026

We good? Okay. Well, good morning everyone, and thanks for joining. I'm the analyst, Tim Mulrooney, that covers APi Group here at William Blair. I'm required to inform you that for a complete list of research disclosures and conflicts of interest to visit our website at williamblair.com. We're very pleased to have with us this morning at APi Group, that's CEO Russ Becker and Adam Walters, that's Senior Director of IR. We picked up APi Group two, maybe three years ago. Still relatively early in the story and got very excited about the opportunity. I think you all were trading at about 12 times EBITDA at that time. You're taking credit? Yes. Yeah. Okay. Full credit. We were excited because what we saw in this business was, yeah, you had the specialty business, which can be, I think, potentially more cyclical and maybe more of a construction type business, but then you have this fire life safety business, which we viewed as a real gem, and very similar to many of these other types of high-quality services businesses that get very high multiples. The secret's out, because now you've re-rated, and I think everyone, the market, is valuing that business more like how they value many of these other high-quality services businesses that are out there today. I'm really excited to dig in with you on both sides, the safety and the specialty side. Before we do that, this is a generalist conference. We're going to do this as a fireside chat, and then we have a breakout session, by the way, after this at the Burnham A room, where we can dig in more detail. We're going to do this as a fireside chat, but maybe if you don't mind just spending a couple minutes to give an overview on the business, just in case there's anyone out here that's not so familiar with APi Group. Sure. Happy to do that. Thank you. Thanks for having us, Tim, as well. Thank you for everybody for coming and showing interest in the company. My name's Russ Becker, and I'm the President and CEO of APi. I have actually been with this company for over 30 years. I started in one of our operating businesses and have really been serving the company in a similar capacity that I am today since 2002. I've seen the company through a tremendous amount of change during that period of time. When I think when I started with APi, we were about a $600 million, 3% business. Last year, we finished at $7.9 billion in revenue and a 13.2% EBITDA margin. I attribute a lot of that growth and improvement in business performance to our company's enduring purpose, which is building great leaders, and the investment that we make in our people as human beings and as leaders. Leadership development has been a huge part of our company since I started at the parent company in 2002, and I would tell you that it defines our culture and who we are. Our culture is something that we take great pride in continuing to grow and strengthen as we continue to grow as a company. Our business is really organized into two different groups, if you will, or segments. We have our safety services segment, which is our fire protection, fire life safety, and security business. That accounts for about 70% of our total revenue. The other piece of our business is specialty services, which is where our infrastructure business lies, our HVAC business lies. We do HVAC work, we do natural gas distribution replacement and retrofit work, potable water system upgrades, fiber optics, telecommunication. We have a business that's in structural steel manufacturing as well. Last year, 54% of our revenue came from inspection service and monitoring. Our goal and priority is to build a very robust inspection service and monitoring business across our entire portfolio. We have established our 2028 shareholder value creation targets, or what we call 10/16/60+. The 10 stands for $10 billion in revenue, with a 16% EBITDA margin, with our long-term target of 60% of our revenue coming from inspection service and monitoring. The company operates in over 20 countries today. That will expand more with the WTech acquisition that was announced just a few weeks back. Our company traditionally grows organically in the mid-single digit range. We also grow inorganically through M&A. We have a long track record of winning in the M&A space. We've probably done well over 200 acquisitions since I've been the CEO of the company. That's something that we see a lot of opportunity for continued growth for our business. Probably the last thing that I'll leave you with is that we have what we call an inspection-first mindset at APi. What that means is, these hotels are just terrible examples, because the fire systems are different in here. If you took a 50,000 sq ft medical office building, the fire life safety system in that building is required by law to be inspected for functionality and operability at least once a year, and most likely certain components of it, like the fire alarm system, twice a year. We are trying to sell inspections, those inspections to the already built environment as our lead into that client relationship versus the other way around. Traditionally in the industry, most people try to go out and bid and win. I hate the word bid, and we can talk about that, Tim. Bid and win new construction work. When they get done with executing the new construction work, they try to sell that end user and client an inspection and service contract. We're doing it just the opposite way. We're trying to win the inspections with that existing building owner and developing a relationship, because we know for every dollar of inspection revenue we generate, we're going to generate someplace between $3 and $4 worth of service work as a pull-through. If we do a really good job with that client, we're going to develop a sticky relationship with them, so when they do have new expansion needs or retrofit needs, we're going to be in a position, based on our relationship, to negotiate the work versus compete for the work on low price. That is a significant difference in our business and in our business model. Right it's a great company. Yeah. Yeah, no, that's. I'll stop there. really good overview. Thank you. So. I actually do have a whole, so on the quarterly conference calls, I have a list in my notes that says, "Don't say these words on the conference call, or Russ will yell at you publicly on the conference call. I don't yell. Bid Well. I don't yell. You know? Bid is one of them. I hate the word. Yeah, you don't like the word bid. They're not employees, they're teammates. That's true. They're leaders. They're- They're leaders. teammates or leaders. Teammates or leaders. I do not use the word employee. I've actually heard that leadership training. I've spoken to someone that's gone through it, and it sounds like it's quite the experience. Something I'd love to do someday, actually. You've got to come to work for us first. Oh, I can't just do it? No. Oh. Okay. Well, I'll put that in my back pocket. Yeah, why don't you use the word bid? Why do you think it's better to go to market with an inspection-first mindset? When did you decide to do that? Have you always done that? Is that something that you've done more recently? Love to hear a little bit about that journey. On the word bid, to start is, that means that you're going to buy our services because we have the cheapest price. Yep. we have no interest in that. You associate that with low price work. Yeah. Okay. We want our clients to choose to buy our services because we present the best value. Mm-hmm. Yeah. There's a lot that comes with that. It could be safely delivering the work, it could be your speed to execute the work, and timing. Showing up on time. I'm sure at some point somebody's going to want to talk about data centers. Oh, that's right. Your ability to execute is more important than what your cost is for most of the providers or end users. Bid is just, it's actually forbidden to be used at APi. I will correct somebody if they use the word bid, and because there's something, your words matter, and just this whole idea of we're proposing, and we're going to sell our services based on the value and what we bring to that particular client. Got it. Inspections first. The reality of it is, I think we first set a goal in 2006 that we wanted 50% of our revenue to come from what we called service work at the time. Yep. We didn't even differentiate at that time between inspection and service work. I think our mindset around doing the inspections and stuff like that was more like, we need to do the inspections to get the service work. We didn't look at and view winning the inspections that we could actually generate a really good gross margin and a really, really good profitable component of our business. That changed and evolved over time. Where it really got a tremendous amount of energy is when the woman who leads our national inspection sales team now came to work for the company. I'd love to tell everybody in this room that I'm just the most strategic guy. This whole idea of inspections first was our sales leader's, not mine. It was because she's so damn good at it. Yep. It literally started in one of our branches where she showed up as an inspection sales leader. She did such a good job selling inspections, then that morphed into she's the inspection sales leader for that branch. Then the guy that was actually running that business was like, "Hey, you're doing a kickass job. How about you take that idea to this branch and this branch? Yep. It blossomed. Then it's like, "Hey, you're doing a great job. How about we take it to these next three branches?" Well, then that happened to be the guy who's running our safety services segment was actually running Las Vegas at the time, and we promoted him to lead one of our operating units, our business is out in the Northeast. He moved with his wife to New York and he's like, "Hey, how about you come out here and you bring this to our business?" It blossomed there. Then we promoted the guy that was running that company to run the segment. He's like, "Well, how about if we make this a national role?" You know? Yep. It's taken on a life of its own. It's really just evolved over time, and I would say that it got going with earnest in, trying to think, maybe 2016. Okay. You've been doing this for 10 years, has been this slow transition to an inspection-first? Yeah mindset, and now you have X% of branches that you'd consider, what's the term you use, bulletproof? Where your gross margin, gross profit dollars from inspection and sales exceed the SG&A of the branch? 100%. We don't talk about this enough when we talk about our company and our business. A branch literally becomes bulletproof when the inspection service and monitoring business, when those departments, if you will, generate enough gross margin to cover the SG&A of the entire branch. Yeah. It becomes bulletproof because then the project work and the project opportunities that that branch has, they can be even more selective, and then the gross margins on that project work when they're being more selective expand. Yep. They get better. The profitability of the branch, overarching profitability of the branch expands. Gets even better. It gets even better. If you look at Adam's slide deck, there's a slide in there that shows the evolution of a branch. It has those points earmarked along that timeline. that shows, but in this particular case, the gross margins on the project grew by 10 percentage points. That's the thing about this story that I think is maybe a little bit underappreciated. Everyone understands inherently that the service work is 10 percentage points gross margin higher than the project work, and so as your service work is growing high single digit and your project work is growing low single digit, there's going to be some natural margin accretion from that. I think the part that's maybe less well appreciated is how much the being more disciplined on the projects once these branches become bulletproof, how much that's contributing to the margin as well. You gave me a statistic one time, maybe you can share it here. What did your average project margin look like when you took over as CEO relative to today? Well, I can't imagine that it was me that gave you that statistic because I don't know. Oh, okay. And, but- Okay I mean. I think it was a dramatic number, like mid-single digit, or maybe it was average branch profitability or something like that, but it sounded like it was very low. The thought being like, well, people thought it would be so hard to just get to 10% over time. Now here you are sitting at 13. Well, that was like the company was a 3% business when we started. That must be what it is. in 2002, and I think I shared that in my opening remarks. Yeah, it's funny, and I know exactly what you're talking about. Yeah. When I first came to APi Group, this is going to maybe shock you, maybe it won't shock you, but our financial goals as a company was 5%. At the time we were privately held, the majority shareholder of the business was a gentleman by the name of Lee Anderson. I was up at his summer home with him, we'd spent some time. He never has come into the office since I've been with the company. I was up at his summer home. We had some work stuff to talk about, and traditionally, I would go, and we'd spend a couple of hours talking about work stuff, and then I'd stay and have drinks and dinner overnight, and I'd get up early in the morning and drive back to Minneapolis. We were probably finishing up a scotch or something, and I looked at him and I said, "Where did 5% come from?" He looks at me, and the gentleman that had my job before me, his name was Jeff, and he goes, "I don't know. Jeff?" I'm like, "I don't know." I'm like, "Seems pretty low." I said, "For how much risk we take every day," I said, "5% seems pretty low." This is a true story. He looks at me and says, "Well, what do you think it should be?" I said, "I don't know. Let's start with 10." He goes, "Okay." I literally go back to the office. Now, I'm looking at this guy right here who's pretty young. He doesn't even know what a fax machine is, I'm guessing. Some of the cagey veterans I see over here, so write up a memo, send my memo out via fax. Really email was in its infancy, I send out a fax or a memo to everybody saying our new financial target is 10%. Everybody bitched. I'm not kidding you. Everybody's, "Can't be done. Industry average is 3%." All of a sudden, one of our businesses climbs, climbs, gets to 10%. This guy's still running this business to this day. The best part about it was, he didn't stop at 10%, he just kept on going, and his business got to 20%. At APi, we publish our financial results, so every one of our business leaders can see exactly how their company stacks up against their peers. They can see exactly how every branch stacks up with every other branch. We stack rank them highest performance to lowest performance. We actually color code it. If you're meeting our goals, you're in green. If you're trending in the right direction, you're in yellow. If you're missing the target, you're in pink. The only reason you're in pink is that if you put it in red, you can't see the numbers. You can see, and if you have a competitive bone in your body, you don't want to be in the bottom third, right? You create this kind of natural draft that pulls people along. Our business has just continued to grow as we continue to increase the expectations. Yep. We believe and we know that, and our goal is that every one of our branches will operate at 20%. We're not there, I mean, clearly. Right. You know what I mean? Yeah. I suspect we'll always have. Some a challenge or something like that, where maybe you don't have the right leader and you have to make some changes, and you know, or somebody does a poor job on customer selection and gets us in trouble, and we have to work our way through that. It's real, and this is a people-centered business. When you show people, show them kind of the path and share best practices and create an environment of collaboration, there's a lot of opportunity. Yeah a lot of opportunity. It's a great company, and with a lot of continued upside. I think that that's part of the story that investors like so much, is watching this march towards profitability. When you came out with your 2025 targets for 13%, was that 2025? Yeah, 13% and 2025. Yep. Yep, 13/60/80, we called it. 1360- Came out with that in like 2022. There was a lot of skeptics. How are they going to get to 13? Yet you did it. Now the target is 16 by 2028, and I don't have 16 in my model. I don't know how you're going to do it. I don't have any doubt that you are. What's up with this, you know? I'm just saying, you guys keep beating the expectation and delivering, and I think a lot of it goes back to this conversation about it's a people business, and it's about culture and leadership and driving this competitive spirit in the business. I have no doubt that you will hit the 16% number. However, I will note that that would be upside to my model and to consensus if you do it. That's the opportunity. It sounds like a little bit of a throw down. Arm wrestle on stage. I like my chances. Yeah, I don't want to do that. All right. Maybe we should get to some actual numbers here because we've got eight minutes left. High single digit in services. If we're looking at the U.S. fire life safety business, you got high single digit growth in services that you're expecting and low single digit growth in the projects business. Is that correct? That's correct. That's the guidance we give our businesses. That's the guidance you give your businesses. That kind of equates to a mid-single digit growth for the full year. I will note that the comps get tougher in the second half of the year for that business. Can you just help bridge that gap for us between the fact that the comps are getting more difficult, but you still expect that mid-single digit growth for the full year? If you break it out into the two parts that you talked about, the inspection and service business, that just continues to, it's steady Eddie. You know what I mean? We continue to grow that in the high single-digit range. It starts with, we talked about the inspection-first flywheel. It starts with that, our inspection sales leaders continue to knock on the already built environment, take share, it's continue to push price, and that business continues to just be super steady and grow at that high single-digit clip. Talked about the comps get tougher, obviously. I would say the project environment right now, I would say is more robust than normal. Yep. There's a lot of good work out there, and we talk about end markets all the time, and focusing on the right end markets definitely matters. The end markets we're focusing on are very robust right now. The project business is growing- More than- more than low single digits like the long-term algorithm would suggest. We see it in the work we're doing right now. We see it in the backlog. There's just a lot of good work out there, whether it's data center, advanced manufacturing, aviation. There's just a lot of good project work out there, and we're taking advantage of that. That's where you kind of, even though it is tougher comps, we're still projected to continue with the mid-single digit growth throughout the year. Yep, that makes sense. Maybe you could talk a little bit about those end markets. I mean, your data center business, there we go. I can't remember the number. I think you said it was 5% of revenue a few years ago, and then 7%, and now it's going to be closer to 10% this year. I don't know how that splits between your specialty business and your safety business, but presumably some of that is in safety. Is that helping there on the project side? For sure. Our best guess, like you mentioned, is 10% is what we'll land for the year in terms of percentage of revenue coming from data center. It's good work for both segments. I would say specialty is probably a little bit higher than 10%. Maybe 11%, 12% of their work is coming from data center. Safety is a touch lower, maybe 8%, 9% of their work is coming from data center. It's really good opportunities for both businesses. Every data center needs a fire life safety system. They have sprinkler systems, fire alarm detection systems. We're doing the uncertain . We've also been doing the inspection service for a lot of these hyperscalers for a long time. It's good existing customer relationships that we already have, when these new data centers are being built, we already have a relationship with the customer, we're coming in and doing the installation. Then on the specialty side, a lot of good work there as well. There's fiber optic cabling that goes into these data centers, uncertain into the server rack that we're doing. We have an HVAC business that'll do a little bit of data center work every year. Our steel fabrication business does data center work. Good opportunities across both segments. I would also just add, we have a business development leader who, he's got a lot of good relationships with these hyperscalers, with general contractors, and he's been kind of coordinating our sister companies in terms of, we have a data center opportunity in Monroe, Louisiana. Who should we be getting involved? Maybe one of the fire life safety companies has a relationship there's opportunities for our specialty businesses to get involved as well. He's been doing an awesome job coordinating across all of our companies and making sure we're attacking these opportunities as a coordinated group. Okay. All right. That's helpful. Maybe in the last couple of minutes here, I know M&A is a big topic of conversation and an important component to your $10 billion target by 2028. You certainly are on your way there. You've announced a few large acquisitions this year so far. Usually when I see a company announce this much, it's not even a balance sheet conversation. It's like a cultural and an integration conversation. Is it fair to assume that we're hitting the pause button here for a while while you work on those? Do you have more appetite for M&A this year? We have more appetite. Oh. I mean. Be clear. You want me to hesitate? No. I would tell you, the three transactions that we announced that are somewhat larger, they're not that big. You know what I mean? Okay. As it relates to, they're not Chubb-esque, you know what I mean? They're not like Chubb. Yeah, no, they're not Chubb-esque. At the time we bought Chubb, it was a $2 billion company. It operated in 20 different countries. You could argue that there's an element of complexity there that I feel like we've done a really nice job of navigating, and I'm really pleased with where that's at. The Wtech acquisition is a fire suppression business that's based in Mullingar, Ireland, which is just north of Dublin. Ted, I met Ted Wright, their CEO. His family founded the company. It's actually got family origins even though we bought the firm from a private equity firm. Yep. Ted's been with it. Ted and his brother actually bought his parents out, then Ted bought his brother out, it does a few things for us. It brings fire suppression, i.e. sprinkler capabilities, to our business in Western Europe that we don't have that level of expertise that we need. Actually, Ted is an entrepreneur through and through, he's going to bring that mindset to our business, which I think will be really, really healthy for us. Yeah. That business had been publicly traded, sat underneath United Technologies and Carrier, and became pretty corporate-y, to be honest with you. He's going to bring a little bit of that entrepreneurship to the company and to that culture, which is needed. It's not that big a business, and Ted fits our culture through and through. He's already participated in our Leader Labs and things like that. I was there, they had a planning session in Portugal back a month or so ago, and I flew over to Portugal for the meeting. His people are just cut from the same cloth. Okay. Just wonderful people. Then Onyx, which is a Canadian-based firm. I've known Brian Chu, their CEO, since probably 2017. Yeah when he was actually with Brookfield. We've known that firm and stayed in touch with that firm for many, many years. When it actually sold, it was recently sold, and then we bought it 18 months after. Right. We passed on it at the time because we were busy integrating our existing business in Canada, and we just didn't feel like we had the bandwidth to stomach it. I feel like we showed good discipline in saying we couldn't. We had a relationship with Blackstone that goes back to the Chubb acquisition. Okay. That presented itself, and so we were able to buy that business when we did. Yep based on that relationship. CertaSite, which was announced at the end of the year and closed on here, what was it?1st February. That business is like inspection-first. That's the beauty of that business. It's like a center of the fairway transaction for us. Again, it's not that big. It's geographically complementary to our existing portfolio, so minimal overlap. It's a non-union business. It's strong in extinguishers and portables, which is an add for us. There's a lot to it, but it's like that one's already rocking and rolling. Okay One of the things that we have to sell, so to speak, to these owners is really centered on our leadership development efforts. The fact that we have a deep bench in succession planning and all that stuff that comes with it is attractive to these folks. Not everybody wants to be in this world called private equity forever. Right. I think one of the things that you'll hear us, the words that you hear us use all the time when we're pitching why should you sell to us is that we're a forever home. Yep I actually stole that from one of the guys from the elevator business. We had him in actually presenting to our board shortly after the acquisition of Elevated back a couple of years ago. Yeah. His words to our board was, "We'd found our forever home." I thought it was pretty good, so I grabbed it. Very complimentary. Yeah. Yeah. They feel like they found their spot. We have a lot of bandwidth. Okay. We've got a lot of dry powder. Our balance sheet is in a great place. For us, that's our number one priority from when you think about how we're going to use our capital. Yep would be M&A. Yep. We've been active in the market, buying back some shares as well. Okay. All right. That's good color. I know we're out of time, but thank you very much, Russ. Yeah. Thank you. I really appreciate it.

Speaker 3: We good? Okay. Well, good morning everyone, and thanks for joining. I'm the analyst, Tim Mulrooney, that covers APi Group here at William Blair. I'm required to inform you that for a complete list of research disclosures and conflicts of interest to visit our website at williamblair.com. We're very pleased to have with us this morning at APi Group, that's CEO Russ Becker and Adam Walters, that's Senior Director of IR. We picked up APi Group two, maybe three years ago. Still relatively early in the story and got very excited about the opportunity. I think you all were trading at about 12 times EBITDA at that time. We good? we good Okay. okay Well, good morning everyone, and thanks for joining. well good morning everyone and thanks for joining I'm the analyst, Tim Mulrooney, that covers APi Group here at William Blair. i'm the analyst tim mulrooney that covers api group here at william blair I'm required to inform you that for a complete list of research disclosures and conflicts of interest to visit our website at williamblair.com. i'm required to inform you that for a complete list of research disclosures and conflicts of interest to visit our website at williamblair.com We're very pleased to have with us this morning at APi Group, that's CEO Russ Becker and Adam Walters, that's Senior Director of IR. we're very pleased to have with us this morning at api group that's ceo russ becker and adam walters that's senior director of ir We picked up APi Group two, maybe three years ago. we picked up api group two maybe three years ago Still relatively early in the story and got very excited about the opportunity. still relatively early in the story and got very excited about the opportunity I think you all were trading at about 12 times EBITDA at that time. i think you all were trading at about 12 times ebitda at that time

Speaker 2: You're taking credit? You're taking credit? you're taking credit

Speaker 3: Yes. Yes. yes

Speaker 2: Yeah. Okay. Yeah. yeah Okay. okay

Speaker 3: Full credit. We were excited because what we saw in this business was, yeah, you had the specialty business, which can be, I think, potentially more cyclical and maybe more of a construction type business, but then you have this fire life safety business, which we viewed as a real gem, and very similar to many of these other types of high-quality services businesses that get very high multiples. The secret's out, because now you've re-rated, and I think everyone, the market, is valuing that business more like how they value many of these other high-quality services businesses that are out there today. I'm really excited to dig in with you on both sides, the safety and the specialty side. Before we do that, this is a generalist conference. Full credit. full credit We were excited because what we saw in this business was, yeah, you had the specialty business, which can be, I think, potentially more cyclical and maybe more of a construction type business, but then you have this fire life safety business, which we viewed as a real gem, and very similar to many of these other types of high-quality services businesses that get very high multiples. we were excited because what we saw in this business was yeah you had the specialty business which can be i think potentially more cyclical and maybe more of a construction type business but then you have this fire life safety business which we viewed as a real gem and very similar to many of these other types of high-quality services businesses that get very high multiples The secret's out, because now you've re-rated, and I think everyone, the market, is valuing that business more like how they value many of these other high-quality services businesses that are out there today. the secret's out because now you've re-rated and i think everyone the market is valuing that business more like how they value many of these other high-quality services businesses that are out there today I'm really excited to dig in with you on both sides, the safety and the specialty side. i'm really excited to dig in with you on both sides the safety and the specialty side Before we do that, this is a generalist conference. before we do that this is a generalist conference We're going to do this as a fireside chat, and then we have a breakout session, by the way, after this at the Burnham A room, where we can dig in more detail. We're going to do this as a fireside chat, but maybe if you don't mind just spending a couple minutes to give an overview on the business, just in case there's anyone out here that's not so familiar with APi Group. We're going to do this as a fireside chat, and then we have a breakout session, by the way, after this at the Burnham A room, where we can dig in more detail. we're going to do this as a fireside chat and then we have a breakout session by the way after this at the burnham a room where we can dig in more detail We're going to do this as a fireside chat, but maybe if you don't mind just spending a couple minutes to give an overview on the business, just in case there's anyone out here that's not so familiar with APi Group. we're going to do this as a fireside chat but maybe if you don't mind just spending a couple minutes to give an overview on the business just in case there's anyone out here that's not so familiar with api group

Speaker 2: Sure. Happy to do that. Sure. sure Happy to do that. happy to do that

Speaker 3: Thank you. Thank you. thank you

Speaker 2: Thanks for having us, Tim, as well. Thank you for everybody for coming and showing interest in the company. My name's Russ Becker, and I'm the President and CEO of APi. I have actually been with this company for over 30 years. I started in one of our operating businesses and have really been serving the company in a similar capacity that I am today since 2002. I've seen the company through a tremendous amount of change during that period of time. When I think when I started with APi, we were about a $600 million, 3% business. Last year, we finished at $7.9 billion in revenue and a 13.2% EBITDA margin. Thanks for having us, Tim, as well. thanks for having us tim as well Thank you for everybody for coming and showing interest in the company. thank you for everybody for coming and showing interest in the company My name's Russ Becker, and I'm the President and CEO of APi. my name's russ becker and i'm the president and ceo of api I have actually been with this company for over 30 years. i have actually been with this company for over 30 years I started in one of our operating businesses and have really been serving the company in a similar capacity that I am today since 2002. i started in one of our operating businesses and have really been serving the company in a similar capacity that i am today since 2002 I've seen the company through a tremendous amount of change during that period of time. i've seen the company through a tremendous amount of change during that period of time When I think when I started with APi, we were about a $600 million, 3% business. when i think when i started with api we were about a $600 million 3% business Last year, we finished at $7.9 billion in revenue and a 13.2% EBITDA margin. last year we finished at $7.9 billion in revenue and a 13.2% ebitda margin I attribute a lot of that growth and improvement in business performance to our company's enduring purpose, which is building great leaders, and the investment that we make in our people as human beings and as leaders. Leadership development has been a huge part of our company since I started at the parent company in 2002, and I would tell you that it defines our culture and who we are. Our culture is something that we take great pride in continuing to grow and strengthen as we continue to grow as a company. Our business is really organized into two different groups, if you will, or segments. We have our safety services segment, which is our fire protection, fire life safety, and security business. That accounts for about 70% of our total revenue. I attribute a lot of that growth and improvement in business performance to our company's enduring purpose, which is building great leaders, and the investment that we make in our people as human beings and as leaders. i attribute a lot of that growth and improvement in business performance to our company's enduring purpose which is building great leaders and the investment that we make in our people as human beings and as leaders Leadership development has been a huge part of our company since I started at the parent company in 2002, and I would tell you that it defines our culture and who we are. leadership development has been a huge part of our company since i started at the parent company in 2002 and i would tell you that it defines our culture and who we are Our culture is something that we take great pride in continuing to grow and strengthen as we continue to grow as a company. our culture is something that we take great pride in continuing to grow and strengthen as we continue to grow as a company Our business is really organized into two different groups, if you will, or segments. our business is really organized into two different groups if you will or segments We have our safety services segment, which is our fire protection, fire life safety, and security business. we have our safety services segment which is our fire protection fire life safety and security business That accounts for about 70% of our total revenue. that accounts for about 70% of our total revenue The other piece of our business is specialty services, which is where our infrastructure business lies, our HVAC business lies. We do HVAC work, we do natural gas distribution replacement and retrofit work, potable water system upgrades, fiber optics, telecommunication. We have a business that's in structural steel manufacturing as well. Last year, 54% of our revenue came from inspection service and monitoring. Our goal and priority is to build a very robust inspection service and monitoring business across our entire portfolio. We have established our 2028 shareholder value creation targets, or what we call 10/16/60+. The 10 stands for $10 billion in revenue, with a 16% EBITDA margin, with our long-term target of 60% of our revenue coming from inspection service and monitoring. The company operates in over 20 countries today. The other piece of our business is specialty services, which is where our infrastructure business lies, our HVAC business lies. the other piece of our business is specialty services which is where our infrastructure business lies our hvac business lies We do HVAC work, we do natural gas distribution replacement and retrofit work, potable water system upgrades, fiber optics, telecommunication. we do hvac work we do natural gas distribution replacement and retrofit work potable water system upgrades fiber optics telecommunication We have a business that's in structural steel manufacturing as well. we have a business that's in structural steel manufacturing as well Last year, 54% of our revenue came from inspection service and monitoring. last year 54% of our revenue came from inspection service and monitoring Our goal and priority is to build a very robust inspection service and monitoring business across our entire portfolio. our goal and priority is to build a very robust inspection service and monitoring business across our entire portfolio We have established our 2028 shareholder value creation targets, or what we call 10/16/60+. we have established our 2028 shareholder value creation targets or what we call 10/16/60+ The 10 stands for $10 billion in revenue, with a 16% EBITDA margin, with our long-term target of 60% of our revenue coming from inspection service and monitoring. the 10 stands for $10 billion in revenue with a 16% ebitda margin with our long-term target of 60% of our revenue coming from inspection service and monitoring The company operates in over 20 countries today. the company operates in over 20 countries today That will expand more with the WTech acquisition that was announced just a few weeks back. Our company traditionally grows organically in the mid-single digit range. We also grow inorganically through M&A. We have a long track record of winning in the M&A space. We've probably done well over 200 acquisitions since I've been the CEO of the company. That's something that we see a lot of opportunity for continued growth for our business. Probably the last thing that I'll leave you with is that we have what we call an inspection-first mindset at APi. What that means is, these hotels are just terrible examples, because the fire systems are different in here. That will expand more with the WTech acquisition that was announced just a few weeks back. that will expand more with the wtech acquisition that was announced just a few weeks back Our company traditionally grows organically in the mid-single digit range. our company traditionally grows organically in the mid-single digit range We also grow inorganically through M&A. we also grow inorganically through m&a We have a long track record of winning in the M&A space. we have a long track record of winning in the m&a space We've probably done well over 200 acquisitions since I've been the CEO of the company. we've probably done well over 200 acquisitions since i've been the ceo of the company That's something that we see a lot of opportunity for continued growth for our business. that's something that we see a lot of opportunity for continued growth for our business Probably the last thing that I'll leave you with is that we have what we call an inspection-first mindset at APi. probably the last thing that i'll leave you with is that we have what we call an inspection-first mindset at api What that means is, these hotels are just terrible examples, because the fire systems are different in here. what that means is these hotels are just terrible examples because the fire systems are different in here If you took a 50,000 sq ft medical office building, the fire life safety system in that building is required by law to be inspected for functionality and operability at least once a year, and most likely certain components of it, like the fire alarm system, twice a year. We are trying to sell inspections, those inspections to the already built environment as our lead into that client relationship versus the other way around. Traditionally in the industry, most people try to go out and bid and win. I hate the word bid, and we can talk about that, Tim. Bid and win new construction work. When they get done with executing the new construction work, they try to sell that end user and client an inspection and service contract. We're doing it just the opposite way. If you took a 50,000 sq ft medical office building, the fire life safety system in that building is required by law to be inspected for functionality and operability at least once a year, and most likely certain components of it, like the fire alarm system, twice a year. if you took a 50,000 sq ft medical office building the fire life safety system in that building is required by law to be inspected for functionality and operability at least once a year and most likely certain components of it like the fire alarm system twice a year We are trying to sell inspections, those inspections to the already built environment as our lead into that client relationship versus the other way around. we are trying to sell inspections those inspections to the already built environment as our lead into that client relationship versus the other way around Traditionally in the industry, most people try to go out and bid and win. traditionally in the industry most people try to go out and bid and win I hate the word bid, and we can talk about that, Tim. i hate the word bid and we can talk about that tim Bid and win new construction work. bid and win new construction work When they get done with executing the new construction work, they try to sell that end user and client an inspection and service contract. when they get done with executing the new construction work they try to sell that end user and client an inspection and service contract We're doing it just the opposite way. we're doing it just the opposite way We're trying to win the inspections with that existing building owner and developing a relationship, because we know for every dollar of inspection revenue we generate, we're going to generate someplace between $3 and $4 worth of service work as a pull-through. If we do a really good job with that client, we're going to develop a sticky relationship with them, so when they do have new expansion needs or retrofit needs, we're going to be in a position, based on our relationship, to negotiate the work versus compete for the work on low price. That is a significant difference in our business and in our business model. We're trying to win the inspections with that existing building owner and developing a relationship, because we know for every dollar of inspection revenue we generate, we're going to generate someplace between $3 and $4 worth of service work as a pull-through. we're trying to win the inspections with that existing building owner and developing a relationship because we know for every dollar of inspection revenue we generate we're going to generate someplace between $3 and $4 worth of service work as a pull-through If we do a really good job with that client, we're going to develop a sticky relationship with them, so when they do have new expansion needs or retrofit needs, we're going to be in a position, based on our relationship, to negotiate the work versus compete for the work on low price. if we do a really good job with that client we're going to develop a sticky relationship with them so when they do have new expansion needs or retrofit needs we're going to be in a position based on our relationship to negotiate the work versus compete for the work on low price That is a significant difference in our business and in our business model. that is a significant difference in our business and in our business model

Speaker 3: Right Right right

Speaker 2: it's a great company. Yeah. it's a great company. it's a great company Yeah. yeah

Speaker 3: Yeah, no, that's. Yeah, no, that's. yeah no that's

Speaker 2: I'll stop there. I'll stop there. i'll stop there

Speaker 3: really good overview. Thank you. really good overview. really good overview Thank you. thank you

Speaker 2: So. So. so

Speaker 3: I actually do have a whole, so on the quarterly conference calls, I have a list in my notes that says, "Don't say these words on the conference call, or Russ will yell at you publicly on the conference call. I actually do have a whole, so on the quarterly conference calls, I have a list in my notes that says, "Don't say these words on the conference call, or Russ will yell at you publicly on the conference call. i actually do have a whole so on the quarterly conference calls i have a list in my notes that says "don't say these words on the conference call or russ will yell at you publicly on the conference call

Speaker 2: I don't yell. I don't yell. i don't yell

Speaker 3: Bid Well. Bid Well. bid well

Speaker 2: I don't yell. You know? I don't yell. i don't yell You know? you know

Speaker 3: Bid is one of them. Bid is one of them. bid is one of them

Speaker 2: I hate the word. I hate the word. i hate the word

Speaker 3: Yeah, you don't like the word bid. They're not employees, they're teammates. Yeah, you don't like the word bid. yeah you don't like the word bid They're not employees, they're teammates. they're not employees they're teammates

Speaker 2: That's true. That's true. that's true

Speaker 3: They're leaders. They're leaders. they're leaders

Speaker 2: They're- They're- they're-

Speaker 3: They're leaders. They're leaders. they're leaders

Speaker 2: teammates or leaders. teammates or leaders. teammates or leaders

Speaker 3: Teammates or leaders. Teammates or leaders. teammates or leaders

Speaker 2: I do not use the word employee. I do not use the word employee. i do not use the word employee

Speaker 3: I've actually heard that leadership training. I've spoken to someone that's gone through it, and it sounds like it's quite the experience. Something I'd love to do someday, actually. I've actually heard that leadership training. i've actually heard that leadership training I've spoken to someone that's gone through it, and it sounds like it's quite the experience. i've spoken to someone that's gone through it and it sounds like it's quite the experience Something I'd love to do someday, actually. something i'd love to do someday actually

Speaker 2: You've got to come to work for us first. You've got to come to work for us first. you've got to come to work for us first

Speaker 3: Oh, I can't just do it? Oh, I can't just do it? oh i can't just do it

Speaker 2: No. No. no

Speaker 3: Oh. Okay. Well, I'll put that in my back pocket. Yeah, why don't you use the word bid? Why do you think it's better to go to market with an inspection-first mindset? When did you decide to do that? Have you always done that? Is that something that you've done more recently? Love to hear a little bit about that journey. Oh. oh Okay. okay Well, I'll put that in my back pocket. well i'll put that in my back pocket Yeah, why don't you use the word bid? yeah why don't you use the word bid Why do you think it's better to go to market with an inspection-first mindset? why do you think it's better to go to market with an inspection-first mindset When did you decide to do that? when did you decide to do that Have you always done that? have you always done that Is that something that you've done more recently? is that something that you've done more recently Love to hear a little bit about that journey. love to hear a little bit about that journey

Speaker 2: On the word bid, to start is, that means that you're going to buy our services because we have the cheapest price. On the word bid, to start is, that means that you're going to buy our services because we have the cheapest price. on the word bid to start is that means that you're going to buy our services because we have the cheapest price

Speaker 3: Yep. Yep. yep

Speaker 2: we have no interest in that. we have no interest in that. we have no interest in that

Speaker 3: You associate that with low price work. You associate that with low price work. you associate that with low price work

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Okay. Okay. okay

Speaker 2: We want our clients to choose to buy our services because we present the best value. We want our clients to choose to buy our services because we present the best value. we want our clients to choose to buy our services because we present the best value

Speaker 3: Mm-hmm. Yeah. Mm-hmm. mm-hmm Yeah. yeah

Speaker 2: There's a lot that comes with that. It could be safely delivering the work, it could be your speed to execute the work, and timing. There's a lot that comes with that. there's a lot that comes with that It could be safely delivering the work, it could be your speed to execute the work, and timing. it could be safely delivering the work it could be your speed to execute the work and timing

Speaker 3: Showing up on time. Showing up on time. showing up on time

Speaker 2: I'm sure at some point somebody's going to want to talk about data centers. I'm sure at some point somebody's going to want to talk about data centers. i'm sure at some point somebody's going to want to talk about data centers

Speaker 3: Oh, that's right. Oh, that's right. oh that's right

Speaker 2: Your ability to execute is more important than what your cost is for most of the providers or end users. Bid is just, it's actually forbidden to be used at APi. I will correct somebody if they use the word bid, and because there's something, your words matter, and just this whole idea of we're proposing, and we're going to sell our services based on the value and what we bring to that particular client. Your ability to execute is more important than what your cost is for most of the providers or end users. your ability to execute is more important than what your cost is for most of the providers or end users Bid is just, it's actually forbidden to be used at APi. bid is just it's actually forbidden to be used at api I will correct somebody if they use the word bid, and because there's something, your words matter, and just this whole idea of we're proposing, and we're going to sell our services based on the value and what we bring to that particular client. i will correct somebody if they use the word bid and because there's something your words matter and just this whole idea of we're proposing and we're going to sell our services based on the value and what we bring to that particular client

Speaker 3: Got it. Got it. got it

Speaker 2: Inspections first. The reality of it is, I think we first set a goal in 2006 that we wanted 50% of our revenue to come from what we called service work at the time. Inspections first. inspections first The reality of it is, I think we first set a goal in 2006 that we wanted 50% of our revenue to come from what we called service work at the time. the reality of it is i think we first set a goal in 2006 that we wanted 50% of our revenue to come from what we called service work at the time

Speaker 3: Yep. Yep. yep

Speaker 2: We didn't even differentiate at that time between inspection and service work. I think our mindset around doing the inspections and stuff like that was more like, we need to do the inspections to get the service work. We didn't look at and view winning the inspections that we could actually generate a really good gross margin and a really, really good profitable component of our business. That changed and evolved over time. Where it really got a tremendous amount of energy is when the woman who leads our national inspection sales team now came to work for the company. I'd love to tell everybody in this room that I'm just the most strategic guy. This whole idea of inspections first was our sales leader's, not mine. It was because she's so damn good at it. We didn't even differentiate at that time between inspection and service work. we didn't even differentiate at that time between inspection and service work I think our mindset around doing the inspections and stuff like that was more like, we need to do the inspections to get the service work. i think our mindset around doing the inspections and stuff like that was more like we need to do the inspections to get the service work We didn't look at and view winning the inspections that we could actually generate a really good gross margin and a really, really good profitable component of our business. we didn't look at and view winning the inspections that we could actually generate a really good gross margin and a really really good profitable component of our business That changed and evolved over time. that changed and evolved over time Where it really got a tremendous amount of energy is when the woman who leads our national inspection sales team now came to work for the company. where it really got a tremendous amount of energy is when the woman who leads our national inspection sales team now came to work for the company I'd love to tell everybody in this room that I'm just the most strategic guy. i'd love to tell everybody in this room that i'm just the most strategic guy This whole idea of inspections first was our sales leader's, not mine. this whole idea of inspections first was our sales leader's not mine It was because she's so damn good at it. it was because she's so damn good at it

Speaker 3: Yep. Yep. yep

Speaker 2: It literally started in one of our branches where she showed up as an inspection sales leader. She did such a good job selling inspections, then that morphed into she's the inspection sales leader for that branch. Then the guy that was actually running that business was like, "Hey, you're doing a kickass job. How about you take that idea to this branch and this branch? It literally started in one of our branches where she showed up as an inspection sales leader. it literally started in one of our branches where she showed up as an inspection sales leader She did such a good job selling inspections, then that morphed into she's the inspection sales leader for that branch. she did such a good job selling inspections then that morphed into she's the inspection sales leader for that branch Then the guy that was actually running that business was like, "Hey, you're doing a kickass job. then the guy that was actually running that business was like "hey you're doing a kickass job How about you take that idea to this branch and this branch? how about you take that idea to this branch and this branch

Speaker 3: Yep. Yep. yep

Speaker 2: It blossomed. Then it's like, "Hey, you're doing a great job. How about we take it to these next three branches?" Well, then that happened to be the guy who's running our safety services segment was actually running Las Vegas at the time, and we promoted him to lead one of our operating units, our business is out in the Northeast. He moved with his wife to New York and he's like, "Hey, how about you come out here and you bring this to our business?" It blossomed there. Then we promoted the guy that was running that company to run the segment. He's like, "Well, how about if we make this a national role?" You know? It blossomed. it blossomed Then it's like, "Hey, you're doing a great job. then it's like "hey you're doing a great job How about we take it to these next three branches?" Well, then that happened to be the guy who's running our safety services segment was actually running Las Vegas at the time, and we promoted him to lead one of our operating units, our business is out in the Northeast. how about we take it to these next three branches?" well then that happened to be the guy who's running our safety services segment was actually running las vegas at the time and we promoted him to lead one of our operating units our business is out in the northeast He moved with his wife to New York and he's like, "Hey, how about you come out here and you bring this to our business?" It blossomed there. he moved with his wife to new york and he's like "hey how about you come out here and you bring this to our business?" it blossomed there Then we promoted the guy that was running that company to run the segment. then we promoted the guy that was running that company to run the segment He's like, "Well, how about if we make this a national role?" You know? he's like "well how about if we make this a national role?" you know

Speaker 3: Yep. Yep. yep

Speaker 2: It's taken on a life of its own. It's really just evolved over time, and I would say that it got going with earnest in, trying to think, maybe 2016. It's taken on a life of its own. it's taken on a life of its own It's really just evolved over time, and I would say that it got going with earnest in, trying to think, maybe 2016. it's really just evolved over time and i would say that it got going with earnest in trying to think maybe 2016

Speaker 3: Okay. You've been doing this for 10 years, has been this slow transition to an inspection-first? Okay. okay You've been doing this for 10 years, has been this slow transition to an inspection-first? you've been doing this for 10 years has been this slow transition to an inspection-first

Speaker 2: Yeah Yeah yeah

Speaker 3: mindset, and now you have X% of branches that you'd consider, what's the term you use, bulletproof? Where your gross margin, gross profit dollars from inspection and sales exceed the SG&A of the branch? mindset, and now you have X% of branches that you'd consider, what's the term you use, bulletproof? mindset and now you have x% of branches that you'd consider what's the term you use bulletproof Where your gross margin, gross profit dollars from inspection and sales exceed the SG&A of the branch? where your gross margin gross profit dollars from inspection and sales exceed the sg&a of the branch

Speaker 2: 100%. We don't talk about this enough when we talk about our company and our business. A branch literally becomes bulletproof when the inspection service and monitoring business, when those departments, if you will, generate enough gross margin to cover the SG&A of the entire branch. 100%. 100% We don't talk about this enough when we talk about our company and our business. we don't talk about this enough when we talk about our company and our business A branch literally becomes bulletproof when the inspection service and monitoring business, when those departments, if you will, generate enough gross margin to cover the SG&A of the entire branch. a branch literally becomes bulletproof when the inspection service and monitoring business when those departments if you will generate enough gross margin to cover the sg&a of the entire branch

Speaker 3: Yeah. Yeah. yeah

Speaker 2: It becomes bulletproof because then the project work and the project opportunities that that branch has, they can be even more selective, and then the gross margins on that project work when they're being more selective expand. It becomes bulletproof because then the project work and the project opportunities that that branch has, they can be even more selective, and then the gross margins on that project work when they're being more selective expand. it becomes bulletproof because then the project work and the project opportunities that that branch has they can be even more selective and then the gross margins on that project work when they're being more selective expand

Speaker 3: Yep. Yep. yep

Speaker 2: They get better. The profitability of the branch, overarching profitability of the branch expands. They get better. they get better The profitability of the branch, overarching profitability of the branch expands. the profitability of the branch overarching profitability of the branch expands

Speaker 3: Gets even better. Gets even better. gets even better

Speaker 2: It gets even better. If you look at Adam's slide deck, there's a slide in there that shows the evolution of a branch. It gets even better. it gets even better If you look at Adam's slide deck, there's a slide in there that shows the evolution of a branch. if you look at adam's slide deck there's a slide in there that shows the evolution of a branch It has those points earmarked along that timeline. It has those points earmarked along that timeline. it has those points earmarked along that timeline that shows, but in this particular case, the gross margins on the project grew by 10 percentage points. that shows, but in this particular case, the gross margins on the project grew by 10 percentage points. that shows but in this particular case the gross margins on the project grew by 10 percentage points

Speaker 3: That's the thing about this story that I think is maybe a little bit underappreciated. Everyone understands inherently that the service work is 10 percentage points gross margin higher than the project work, and so as your service work is growing high single digit and your project work is growing low single digit, there's going to be some natural margin accretion from that. I think the part that's maybe less well appreciated is how much the being more disciplined on the projects once these branches become bulletproof, how much that's contributing to the margin as well. You gave me a statistic one time, maybe you can share it here. What did your average project margin look like when you took over as CEO relative to today? That's the thing about this story that I think is maybe a little bit underappreciated. that's the thing about this story that i think is maybe a little bit underappreciated Everyone understands inherently that the service work is 10 percentage points gross margin higher than the project work, and so as your service work is growing high single digit and your project work is growing low single digit, there's going to be some natural margin accretion from that. everyone understands inherently that the service work is 10 percentage points gross margin higher than the project work and so as your service work is growing high single digit and your project work is growing low single digit there's going to be some natural margin accretion from that I think the part that's maybe less well appreciated is how much the being more disciplined on the projects once these branches become bulletproof, how much that's contributing to the margin as well. i think the part that's maybe less well appreciated is how much the being more disciplined on the projects once these branches become bulletproof how much that's contributing to the margin as well You gave me a statistic one time, maybe you can share it here. you gave me a statistic one time maybe you can share it here What did your average project margin look like when you took over as CEO relative to today? what did your average project margin look like when you took over as ceo relative to today

Speaker 2: Well, I can't imagine that it was me that gave you that statistic because I don't know. Well, I can't imagine that it was me that gave you that statistic because I don't know. well i can't imagine that it was me that gave you that statistic because i don't know

Speaker 3: Oh, okay. Oh, okay. oh okay

Speaker 2: And, but- And, but- and but-

Speaker 3: Okay Okay okay

Speaker 2: I mean. I mean. i mean

Speaker 3: I think it was a dramatic number, like mid-single digit, or maybe it was average branch profitability or something like that, but it sounded like it was very low. The thought being like, well, people thought it would be so hard to just get to 10% over time. Now here you are sitting at 13. I think it was a dramatic number, like mid-single digit, or maybe it was average branch profitability or something like that, but it sounded like it was very low. i think it was a dramatic number like mid-single digit or maybe it was average branch profitability or something like that but it sounded like it was very low The thought being like, well, people thought it would be so hard to just get to 10% over time. the thought being like well people thought it would be so hard to just get to 10% over time Now here you are sitting at 13. now here you are sitting at 13

Speaker 2: Well, that was like the company was a 3% business when we started. Well, that was like the company was a 3% business when we started. well that was like the company was a 3% business when we started

Speaker 3: That must be what it is. That must be what it is. that must be what it is

Speaker 2: in 2002, and I think I shared that in my opening remarks. Yeah, it's funny, and I know exactly what you're talking about. in 2002, and I think I shared that in my opening remarks. in 2002 and i think i shared that in my opening remarks Yeah, it's funny, and I know exactly what you're talking about. yeah it's funny and i know exactly what you're talking about

Speaker 3: Yeah. Yeah. yeah

Speaker 2: When I first came to APi Group, this is going to maybe shock you, maybe it won't shock you, but our financial goals as a company was 5%. At the time we were privately held, the majority shareholder of the business was a gentleman by the name of Lee Anderson. I was up at his summer home with him, we'd spent some time. He never has come into the office since I've been with the company. I was up at his summer home. We had some work stuff to talk about, and traditionally, I would go, and we'd spend a couple of hours talking about work stuff, and then I'd stay and have drinks and dinner overnight, and I'd get up early in the morning and drive back to Minneapolis. When I first came to APi Group, this is going to maybe shock you, maybe it won't shock you, but our financial goals as a company was 5%. when i first came to api group this is going to maybe shock you maybe it won't shock you but our financial goals as a company was 5% At the time we were privately held, the majority shareholder of the business was a gentleman by the name of Lee Anderson. at the time we were privately held the majority shareholder of the business was a gentleman by the name of lee anderson I was up at his summer home with him, we'd spent some time. i was up at his summer home with him we'd spent some time He never has come into the office since I've been with the company. he never has come into the office since i've been with the company I was up at his summer home. i was up at his summer home We had some work stuff to talk about, and traditionally, I would go, and we'd spend a couple of hours talking about work stuff, and then I'd stay and have drinks and dinner overnight, and I'd get up early in the morning and drive back to Minneapolis. we had some work stuff to talk about and traditionally i would go and we'd spend a couple of hours talking about work stuff and then i'd stay and have drinks and dinner overnight and i'd get up early in the morning and drive back to minneapolis We were probably finishing up a scotch or something, and I looked at him and I said, "Where did 5% come from?" He looks at me, and the gentleman that had my job before me, his name was Jeff, and he goes, "I don't know. Jeff?" I'm like, "I don't know." I'm like, "Seems pretty low." I said, "For how much risk we take every day," I said, "5% seems pretty low." This is a true story. He looks at me and says, "Well, what do you think it should be?" I said, "I don't know. Let's start with 10." He goes, "Okay." I literally go back to the office. Now, I'm looking at this guy right here who's pretty young. He doesn't even know what a fax machine is, I'm guessing. We were probably finishing up a scotch or something, and I looked at him and I said, "Where did 5% come from?" He looks at me, and the gentleman that had my job before me, his name was Jeff, and he goes, "I don't know. we were probably finishing up a scotch or something and i looked at him and i said "where did 5% come from?" he looks at me and the gentleman that had my job before me his name was jeff and he goes "i don't know Jeff?" I'm like, "I don't know." I'm like, "Seems pretty low." I said, "For how much risk we take every day," I said, "5% seems pretty low." This is a true story. jeff?" i'm like "i don't know." i'm like "seems pretty low." i said "for how much risk we take every day," i said "5% seems pretty low." this is a true story He looks at me and says, "Well, what do you think it should be?" I said, "I don't know. he looks at me and says "well what do you think it should be?" i said "i don't know Let's start with 10." He goes, "Okay." I literally go back to the office. let's start with 10." he goes "okay." i literally go back to the office Now, I'm looking at this guy right here who's pretty young. now i'm looking at this guy right here who's pretty young He doesn't even know what a fax machine is, I'm guessing. he doesn't even know what a fax machine is i'm guessing Some of the cagey veterans I see over here, so write up a memo, send my memo out via fax. Really email was in its infancy, I send out a fax or a memo to everybody saying our new financial target is 10%. Everybody bitched. I'm not kidding you. Everybody's, "Can't be done. Industry average is 3%." All of a sudden, one of our businesses climbs, climbs, gets to 10%. This guy's still running this business to this day. The best part about it was, he didn't stop at 10%, he just kept on going, and his business got to 20%. At APi, we publish our financial results, so every one of our business leaders can see exactly how their company stacks up against their peers. They can see exactly how every branch stacks up with every other branch. Some of the cagey veterans I see over here, so write up a memo, send my memo out via fax. some of the cagey veterans i see over here so write up a memo send my memo out via fax Really email was in its infancy, I send out a fax or a memo to everybody saying our new financial target is 10%. really email was in its infancy i send out a fax or a memo to everybody saying our new financial target is 10% Everybody bitched. everybody bitched I'm not kidding you. i'm not kidding you Everybody's, "Can't be done. everybody's "can't be done Industry average is 3%." All of a sudden, one of our businesses climbs, climbs, gets to 10%. industry average is 3%." all of a sudden one of our businesses climbs climbs gets to 10% This guy's still running this business to this day. this guy's still running this business to this day The best part about it was, he didn't stop at 10%, he just kept on going, and his business got to 20%. the best part about it was he didn't stop at 10% he just kept on going and his business got to 20% At APi, we publish our financial results, so every one of our business leaders can see exactly how their company stacks up against their peers. at api we publish our financial results so every one of our business leaders can see exactly how their company stacks up against their peers They can see exactly how every branch stacks up with every other branch. they can see exactly how every branch stacks up with every other branch We stack rank them highest performance to lowest performance. We actually color code it. If you're meeting our goals, you're in green. If you're trending in the right direction, you're in yellow. If you're missing the target, you're in pink. The only reason you're in pink is that if you put it in red, you can't see the numbers. You can see, and if you have a competitive bone in your body, you don't want to be in the bottom third, right? You create this kind of natural draft that pulls people along. Our business has just continued to grow as we continue to increase the expectations. We stack rank them highest performance to lowest performance. we stack rank them highest performance to lowest performance We actually color code it. we actually color code it If you're meeting our goals, you're in green. if you're meeting our goals you're in green If you're trending in the right direction, you're in yellow. if you're trending in the right direction you're in yellow If you're missing the target, you're in pink. if you're missing the target you're in pink The only reason you're in pink is that if you put it in red, you can't see the numbers. the only reason you're in pink is that if you put it in red you can't see the numbers You can see, and if you have a competitive bone in your body, you don't want to be in the bottom third, right? you can see and if you have a competitive bone in your body you don't want to be in the bottom third right You create this kind of natural draft that pulls people along. you create this kind of natural draft that pulls people along Our business has just continued to grow as we continue to increase the expectations. our business has just continued to grow as we continue to increase the expectations

Speaker 3: Yep. Yep. yep

Speaker 2: We believe and we know that, and our goal is that every one of our branches will operate at 20%. We're not there, I mean, clearly. We believe and we know that, and our goal is that every one of our branches will operate at 20%. we believe and we know that and our goal is that every one of our branches will operate at 20% We're not there, I mean, clearly. we're not there i mean clearly

Speaker 3: Right. Right. right

Speaker 2: You know what I mean? You know what I mean? you know what i mean

Speaker 3: Yeah. Yeah. yeah

Speaker 2: I suspect we'll always have. I suspect we'll always have. i suspect we'll always have

Speaker 3: Some Some some

Speaker 2: a challenge or something like that, where maybe you don't have the right leader and you have to make some changes, and you know, or somebody does a poor job on customer selection and gets us in trouble, and we have to work our way through that. It's real, and this is a people-centered business. When you show people, show them kind of the path and share best practices and create an environment of collaboration, there's a lot of opportunity. a challenge or something like that, where maybe you don't have the right leader and you have to make some changes, and you know, or somebody does a poor job on customer selection and gets us in trouble, and we have to work our way through that. a challenge or something like that where maybe you don't have the right leader and you have to make some changes and you know or somebody does a poor job on customer selection and gets us in trouble and we have to work our way through that It's real, and this is a people-centered business. it's real and this is a people-centered business When you show people, show them kind of the path and share best practices and create an environment of collaboration, there's a lot of opportunity. when you show people show them kind of the path and share best practices and create an environment of collaboration there's a lot of opportunity

Speaker 3: Yeah Yeah yeah

Speaker 2: a lot of opportunity. It's a great company, and with a lot of continued upside. a lot of opportunity. a lot of opportunity It's a great company, and with a lot of continued upside. it's a great company and with a lot of continued upside

Speaker 3: I think that that's part of the story that investors like so much, is watching this march towards profitability. When you came out with your 2025 targets for 13%, was that 2025? Yeah, 13% and 2025. I think that that's part of the story that investors like so much, is watching this march towards profitability. i think that that's part of the story that investors like so much is watching this march towards profitability When you came out with your 2025 targets for 13%, was that 2025? when you came out with your 2025 targets for 13% was that 2025 Yeah, 13% and 2025. yeah 13% and 2025

Speaker 2: Yep. Yep, 13/60/80, we called it. Yep. yep Yep, 13/60/80, we called it. yep 13/60/80 we called it

Speaker 3: 1360- 1360- 1360-

Speaker 2: Came out with that in like 2022. Came out with that in like 2022. came out with that in like 2022

Speaker 3: There was a lot of skeptics. How are they going to get to 13? Yet you did it. Now the target is 16 by 2028, and I don't have 16 in my model. I don't know how you're going to do it. I don't have any doubt that you are. There was a lot of skeptics. there was a lot of skeptics How are they going to get to 13? how are they going to get to 13 Yet you did it. yet you did it Now the target is 16 by 2028, and I don't have 16 in my model. now the target is 16 by 2028 and i don't have 16 in my model I don't know how you're going to do it. i don't know how you're going to do it I don't have any doubt that you are. i don't have any doubt that you are

Speaker 2: What's up with this, you know? What's up with this, you know? what's up with this you know

Speaker 3: I'm just saying, you guys keep beating the expectation and delivering, and I think a lot of it goes back to this conversation about it's a people business, and it's about culture and leadership and driving this competitive spirit in the business. I have no doubt that you will hit the 16% number. However, I will note that that would be upside to my model and to consensus if you do it. That's the opportunity. I'm just saying, you guys keep beating the expectation and delivering, and I think a lot of it goes back to this conversation about it's a people business, and it's about culture and leadership and driving this competitive spirit in the business. i'm just saying you guys keep beating the expectation and delivering and i think a lot of it goes back to this conversation about it's a people business and it's about culture and leadership and driving this competitive spirit in the business I have no doubt that you will hit the 16% number. i have no doubt that you will hit the 16% number However, I will note that that would be upside to my model and to consensus if you do it. however i will note that that would be upside to my model and to consensus if you do it That's the opportunity. that's the opportunity

Speaker 2: It sounds like a little bit of a throw down. It sounds like a little bit of a throw down. it sounds like a little bit of a throw down

Speaker 3: Arm wrestle on stage. Arm wrestle on stage. arm wrestle on stage

Speaker 2: I like my chances. I like my chances. i like my chances

Speaker 3: Yeah, I don't want to do that. All right. Maybe we should get to some actual numbers here because we've got eight minutes left. High single digit in services. If we're looking at the U.S. fire life safety business, you got high single digit growth in services that you're expecting and low single digit growth in the projects business. Is that correct? Yeah, I don't want to do that. yeah i don't want to do that All right. all right Maybe we should get to some actual numbers here because we've got eight minutes left. maybe we should get to some actual numbers here because we've got eight minutes left High single digit in services. high single digit in services If we're looking at the U.S. fire life safety business, you got high single digit growth in services that you're expecting and low single digit growth in the projects business. if we're looking at the u.s fire life safety business you got high single digit growth in services that you're expecting and low single digit growth in the projects business Is that correct? is that correct

Speaker 2: That's correct. That's the guidance we give our businesses. That's correct. that's correct That's the guidance we give our businesses. that's the guidance we give our businesses

Speaker 3: That's the guidance you give your businesses. That kind of equates to a mid-single digit growth for the full year. I will note that the comps get tougher in the second half of the year for that business. Can you just help bridge that gap for us between the fact that the comps are getting more difficult, but you still expect that mid-single digit growth for the full year? That's the guidance you give your businesses. that's the guidance you give your businesses That kind of equates to a mid-single digit growth for the full year. that kind of equates to a mid-single digit growth for the full year I will note that the comps get tougher in the second half of the year for that business. i will note that the comps get tougher in the second half of the year for that business Can you just help bridge that gap for us between the fact that the comps are getting more difficult, but you still expect that mid-single digit growth for the full year? can you just help bridge that gap for us between the fact that the comps are getting more difficult but you still expect that mid-single digit growth for the full year

Speaker 1: If you break it out into the two parts that you talked about, the inspection and service business, that just continues to, it's steady Eddie. You know what I mean? We continue to grow that in the high single-digit range. It starts with, we talked about the inspection-first flywheel. It starts with that, our inspection sales leaders continue to knock on the already built environment, take share, it's continue to push price, and that business continues to just be super steady and grow at that high single-digit clip. Talked about the comps get tougher, obviously. I would say the project environment right now, I would say is more robust than normal. If you break it out into the two parts that you talked about, the inspection and service business, that just continues to, it's steady Eddie. if you break it out into the two parts that you talked about the inspection and service business that just continues to it's steady eddie You know what I mean? you know what i mean We continue to grow that in the high single-digit range. we continue to grow that in the high single-digit range It starts with, we talked about the inspection-first flywheel. it starts with we talked about the inspection-first flywheel It starts with that, our inspection sales leaders continue to knock on the already built environment, take share, it's continue to push price, and that business continues to just be super steady and grow at that high single-digit clip. it starts with that our inspection sales leaders continue to knock on the already built environment take share it's continue to push price and that business continues to just be super steady and grow at that high single-digit clip Talked about the comps get tougher, obviously. talked about the comps get tougher obviously I would say the project environment right now, I would say is more robust than normal. i would say the project environment right now i would say is more robust than normal

Speaker 3: Yep. Yep. yep

Speaker 1: There's a lot of good work out there, and we talk about end markets all the time, and focusing on the right end markets definitely matters. The end markets we're focusing on are very robust right now. The project business is growing- There's a lot of good work out there, and we talk about end markets all the time, and focusing on the right end markets definitely matters. there's a lot of good work out there and we talk about end markets all the time and focusing on the right end markets definitely matters The end markets we're focusing on are very robust right now. the end markets we're focusing on are very robust right now The project business is growing- the project business is growing-

Speaker 3: More than- More than- more than-

Speaker 1: more than low single digits like the long-term algorithm would suggest. We see it in the work we're doing right now. We see it in the backlog. There's just a lot of good work out there, whether it's data center, advanced manufacturing, aviation. There's just a lot of good project work out there, and we're taking advantage of that. That's where you kind of, even though it is tougher comps, we're still projected to continue with the mid-single digit growth throughout the year. more than low single digits like the long-term algorithm would suggest. more than low single digits like the long-term algorithm would suggest We see it in the work we're doing right now. we see it in the work we're doing right now We see it in the backlog. we see it in the backlog There's just a lot of good work out there, whether it's data center, advanced manufacturing, aviation. there's just a lot of good work out there whether it's data center advanced manufacturing aviation There's just a lot of good project work out there, and we're taking advantage of that. there's just a lot of good project work out there and we're taking advantage of that That's where you kind of, even though it is tougher comps, we're still projected to continue with the mid-single digit growth throughout the year. that's where you kind of even though it is tougher comps we're still projected to continue with the mid-single digit growth throughout the year

Speaker 3: Yep, that makes sense. Maybe you could talk a little bit about those end markets. I mean, your data center business, there we go. I can't remember the number. I think you said it was 5% of revenue a few years ago, and then 7%, and now it's going to be closer to 10% this year. I don't know how that splits between your specialty business and your safety business, but presumably some of that is in safety. Is that helping there on the project side? Yep, that makes sense. yep that makes sense Maybe you could talk a little bit about those end markets. maybe you could talk a little bit about those end markets I mean, your data center business, there we go. i mean your data center business there we go I can't remember the number. i can't remember the number I think you said it was 5% of revenue a few years ago, and then 7%, and now it's going to be closer to 10% this year. i think you said it was 5% of revenue a few years ago and then 7% and now it's going to be closer to 10% this year I don't know how that splits between your specialty business and your safety business, but presumably some of that is in safety. i don't know how that splits between your specialty business and your safety business but presumably some of that is in safety Is that helping there on the project side? is that helping there on the project side

Speaker 1: For sure. Our best guess, like you mentioned, is 10% is what we'll land for the year in terms of percentage of revenue coming from data center. It's good work for both segments. I would say specialty is probably a little bit higher than 10%. Maybe 11%, 12% of their work is coming from data center. Safety is a touch lower, maybe 8%, 9% of their work is coming from data center. It's really good opportunities for both businesses. Every data center needs a fire life safety system. They have sprinkler systems, fire alarm detection systems. We're doing the uncertain . We've also been doing the inspection service for a lot of these hyperscalers for a long time. For sure. for sure Our best guess, like you mentioned, is 10% is what we'll land for the year in terms of percentage of revenue coming from data center. our best guess like you mentioned is 10% is what we'll land for the year in terms of percentage of revenue coming from data center It's good work for both segments. it's good work for both segments I would say specialty is probably a little bit higher than 10%. i would say specialty is probably a little bit higher than 10% Maybe 11%, 12% of their work is coming from data center. maybe 11% 12% of their work is coming from data center Safety is a touch lower, maybe 8%, 9% of their work is coming from data center. safety is a touch lower maybe 8% 9% of their work is coming from data center It's really good opportunities for both businesses. it's really good opportunities for both businesses Every data center needs a fire life safety system. every data center needs a fire life safety system They have sprinkler systems, fire alarm detection systems. they have sprinkler systems fire alarm detection systems We're doing the uncertain . we're doing the uncertain We've also been doing the inspection service for a lot of these hyperscalers for a long time. we've also been doing the inspection service for a lot of these hyperscalers for a long time It's good existing customer relationships that we already have, when these new data centers are being built, we already have a relationship with the customer, we're coming in and doing the installation. Then on the specialty side, a lot of good work there as well. There's fiber optic cabling that goes into these data centers, uncertain into the server rack that we're doing. We have an HVAC business that'll do a little bit of data center work every year. Our steel fabrication business does data center work. Good opportunities across both segments. I would also just add, we have a business development leader who, he's got a lot of good relationships with these hyperscalers, with general contractors, and he's been kind of coordinating our sister companies in terms of, we have a data center opportunity in Monroe, Louisiana. It's good existing customer relationships that we already have, when these new data centers are being built, we already have a relationship with the customer, we're coming in and doing the installation. it's good existing customer relationships that we already have when these new data centers are being built we already have a relationship with the customer we're coming in and doing the installation Then on the specialty side, a lot of good work there as well. then on the specialty side a lot of good work there as well There's fiber optic cabling that goes into these data centers, uncertain into the server rack that we're doing. there's fiber optic cabling that goes into these data centers uncertain into the server rack that we're doing We have an HVAC business that'll do a little bit of data center work every year. we have an hvac business that'll do a little bit of data center work every year Our steel fabrication business does data center work. our steel fabrication business does data center work Good opportunities across both segments. good opportunities across both segments I would also just add, we have a business development leader who, he's got a lot of good relationships with these hyperscalers, with general contractors, and he's been kind of coordinating our sister companies in terms of, we have a data center opportunity in Monroe, Louisiana. i would also just add we have a business development leader who he's got a lot of good relationships with these hyperscalers with general contractors and he's been kind of coordinating our sister companies in terms of we have a data center opportunity in monroe louisiana Who should we be getting involved? Maybe one of the fire life safety companies has a relationship there's opportunities for our specialty businesses to get involved as well. He's been doing an awesome job coordinating across all of our companies and making sure we're attacking these opportunities as a coordinated group. Who should we be getting involved? who should we be getting involved Maybe one of the fire life safety companies has a relationship there's opportunities for our specialty businesses to get involved as well. maybe one of the fire life safety companies has a relationship there's opportunities for our specialty businesses to get involved as well He's been doing an awesome job coordinating across all of our companies and making sure we're attacking these opportunities as a coordinated group. he's been doing an awesome job coordinating across all of our companies and making sure we're attacking these opportunities as a coordinated group

Speaker 3: Okay. All right. That's helpful. Maybe in the last couple of minutes here, I know M&A is a big topic of conversation and an important component to your $10 billion target by 2028. You certainly are on your way there. You've announced a few large acquisitions this year so far. Usually when I see a company announce this much, it's not even a balance sheet conversation. It's like a cultural and an integration conversation. Is it fair to assume that we're hitting the pause button here for a while while you work on those? Do you have more appetite for M&A this year? Okay. okay All right. all right That's helpful. that's helpful Maybe in the last couple of minutes here, I know M&A is a big topic of conversation and an important component to your $10 billion target by 2028. You certainly are on your way there. maybe in the last couple of minutes here i know m&a is a big topic of conversation and an important component to your $10 billion target by 2028. you certainly are on your way there You've announced a few large acquisitions this year so far. you've announced a few large acquisitions this year so far Usually when I see a company announce this much, it's not even a balance sheet conversation. usually when i see a company announce this much it's not even a balance sheet conversation It's like a cultural and an integration conversation. it's like a cultural and an integration conversation Is it fair to assume that we're hitting the pause button here for a while while you work on those? is it fair to assume that we're hitting the pause button here for a while while you work on those Do you have more appetite for M&A this year? do you have more appetite for m&a this year

Speaker 2: We have more appetite. We have more appetite. we have more appetite

Speaker 3: Oh. Oh. oh

Speaker 2: I mean. I mean. i mean

Speaker 3: Be clear. Be clear. be clear

Speaker 2: You want me to hesitate? You want me to hesitate? you want me to hesitate

Speaker 3: No. No. no

Speaker 2: I would tell you, the three transactions that we announced that are somewhat larger, they're not that big. You know what I mean? I would tell you, the three transactions that we announced that are somewhat larger, they're not that big. i would tell you the three transactions that we announced that are somewhat larger they're not that big You know what I mean? you know what i mean

Speaker 3: Okay. Okay. okay

Speaker 2: As it relates to, they're not Chubb-esque, you know what I mean? They're not like Chubb. As it relates to, they're not Chubb-esque, you know what I mean? as it relates to they're not chubb-esque you know what i mean They're not like Chubb. they're not like chubb

Speaker 3: Yeah, no, they're not Chubb-esque. Yeah, no, they're not Chubb-esque. yeah no they're not chubb-esque

Speaker 2: At the time we bought Chubb, it was a $2 billion company. It operated in 20 different countries. You could argue that there's an element of complexity there that I feel like we've done a really nice job of navigating, and I'm really pleased with where that's at. The Wtech acquisition is a fire suppression business that's based in Mullingar, Ireland, which is just north of Dublin. Ted, I met Ted Wright, their CEO. His family founded the company. It's actually got family origins even though we bought the firm from a private equity firm. At the time we bought Chubb, it was a $2 billion company. at the time we bought chubb it was a $2 billion company It operated in 20 different countries. it operated in 20 different countries You could argue that there's an element of complexity there that I feel like we've done a really nice job of navigating, and I'm really pleased with where that's at. you could argue that there's an element of complexity there that i feel like we've done a really nice job of navigating and i'm really pleased with where that's at The Wtech acquisition is a fire suppression business that's based in Mullingar, Ireland, which is just north of Dublin. the wtech acquisition is a fire suppression business that's based in mullingar ireland which is just north of dublin Ted, I met Ted Wright, their CEO. ted i met ted wright their ceo His family founded the company. his family founded the company It's actually got family origins even though we bought the firm from a private equity firm. it's actually got family origins even though we bought the firm from a private equity firm

Speaker 3: Yep. Yep. yep

Speaker 2: Ted's been with it. Ted and his brother actually bought his parents out, then Ted bought his brother out, it does a few things for us. It brings fire suppression, i.e. sprinkler capabilities, to our business in Western Europe that we don't have that level of expertise that we need. Actually, Ted is an entrepreneur through and through, he's going to bring that mindset to our business, which I think will be really, really healthy for us. Ted's been with it. ted's been with it Ted and his brother actually bought his parents out, then Ted bought his brother out, it does a few things for us. ted and his brother actually bought his parents out then ted bought his brother out it does a few things for us It brings fire suppression, i.e. sprinkler capabilities, to our business in Western Europe that we don't have that level of expertise that we need. it brings fire suppression i.e sprinkler capabilities to our business in western europe that we don't have that level of expertise that we need Actually, Ted is an entrepreneur through and through, he's going to bring that mindset to our business, which I think will be really, really healthy for us. actually ted is an entrepreneur through and through he's going to bring that mindset to our business which i think will be really really healthy for us

Speaker 3: Yeah. Yeah. yeah

Speaker 2: That business had been publicly traded, sat underneath United Technologies and Carrier, and became pretty corporate-y, to be honest with you. He's going to bring a little bit of that entrepreneurship to the company and to that culture, which is needed. It's not that big a business, and Ted fits our culture through and through. He's already participated in our Leader Labs and things like that. I was there, they had a planning session in Portugal back a month or so ago, and I flew over to Portugal for the meeting. His people are just cut from the same cloth. That business had been publicly traded, sat underneath United Technologies and Carrier, and became pretty corporate-y, to be honest with you. that business had been publicly traded sat underneath united technologies and carrier and became pretty corporate-y to be honest with you He's going to bring a little bit of that entrepreneurship to the company and to that culture, which is needed. he's going to bring a little bit of that entrepreneurship to the company and to that culture which is needed It's not that big a business, and Ted fits our culture through and through. it's not that big a business and ted fits our culture through and through He's already participated in our Leader Labs and things like that. he's already participated in our leader labs and things like that I was there, they had a planning session in Portugal back a month or so ago, and I flew over to Portugal for the meeting. i was there they had a planning session in portugal back a month or so ago and i flew over to portugal for the meeting His people are just cut from the same cloth. his people are just cut from the same cloth

Speaker 3: Okay. Okay. okay

Speaker 2: Just wonderful people. Then Onyx, which is a Canadian-based firm. I've known Brian Chu, their CEO, since probably 2017. Just wonderful people. just wonderful people Then Onyx, which is a Canadian-based firm. then onyx which is a canadian-based firm I've known Brian Chu, their CEO, since probably 2017. i've known brian chu their ceo since probably 2017

Speaker 3: Yeah Yeah yeah

Speaker 2: when he was actually with Brookfield. We've known that firm and stayed in touch with that firm for many, many years. When it actually sold, it was recently sold, and then we bought it 18 months after. when he was actually with Brookfield. when he was actually with brookfield We've known that firm and stayed in touch with that firm for many, many years. we've known that firm and stayed in touch with that firm for many many years When it actually sold, it was recently sold, and then we bought it 18 months after. when it actually sold it was recently sold and then we bought it 18 months after

Speaker 3: Right. Right. right

Speaker 2: We passed on it at the time because we were busy integrating our existing business in Canada, and we just didn't feel like we had the bandwidth to stomach it. I feel like we showed good discipline in saying we couldn't. We had a relationship with Blackstone that goes back to the Chubb acquisition. We passed on it at the time because we were busy integrating our existing business in Canada, and we just didn't feel like we had the bandwidth to stomach it. we passed on it at the time because we were busy integrating our existing business in canada and we just didn't feel like we had the bandwidth to stomach it I feel like we showed good discipline in saying we couldn't. i feel like we showed good discipline in saying we couldn't We had a relationship with Blackstone that goes back to the Chubb acquisition. we had a relationship with blackstone that goes back to the chubb acquisition

Speaker 3: Okay. Okay. okay

Speaker 2: That presented itself, and so we were able to buy that business when we did. That presented itself, and so we were able to buy that business when we did. that presented itself and so we were able to buy that business when we did

Speaker 3: Yep Yep yep

Speaker 2: based on that relationship. CertaSite, which was announced at the end of the year and closed on here, what was it?1st February. That business is like inspection-first. That's the beauty of that business. It's like a center of the fairway transaction for us. Again, it's not that big. It's geographically complementary to our existing portfolio, so minimal overlap. It's a non-union business. It's strong in extinguishers and portables, which is an add for us. There's a lot to it, but it's like that one's already rocking and rolling. based on that relationship. based on that relationship CertaSite, which was announced at the end of the year and closed on here, what was it?1st February . certasite which was announced at the end of the year and closed on here what was it?1st february That business is like inspection-first. that business is like inspection-first That's the beauty of that business. that's the beauty of that business It's like a center of the fairway transaction for us. it's like a center of the fairway transaction for us Again, it's not that big. again it's not that big It's geographically complementary to our existing portfolio, so minimal overlap. it's geographically complementary to our existing portfolio so minimal overlap It's a non-union business. it's a non-union business It's strong in extinguishers and portables, which is an add for us. it's strong in extinguishers and portables which is an add for us There's a lot to it, but it's like that one's already rocking and rolling. there's a lot to it but it's like that one's already rocking and rolling

Speaker 3: Okay Okay okay

Speaker 2: One of the things that we have to sell, so to speak, to these owners is really centered on our leadership development efforts. The fact that we have a deep bench in succession planning and all that stuff that comes with it is attractive to these folks. Not everybody wants to be in this world called private equity forever. One of the things that we have to sell, so to speak, to these owners is really centered on our leadership development efforts. one of the things that we have to sell so to speak to these owners is really centered on our leadership development efforts The fact that we have a deep bench in succession planning and all that stuff that comes with it is attractive to these folks. the fact that we have a deep bench in succession planning and all that stuff that comes with it is attractive to these folks Not everybody wants to be in this world called private equity forever. not everybody wants to be in this world called private equity forever

Speaker 3: Right. Right. right

Speaker 2: I think one of the things that you'll hear us, the words that you hear us use all the time when we're pitching why should you sell to us is that we're a forever home. I think one of the things that you'll hear us, the words that you hear us use all the time when we're pitching why should you sell to us is that we're a forever home. i think one of the things that you'll hear us the words that you hear us use all the time when we're pitching why should you sell to us is that we're a forever home

Speaker 3: Yep Yep yep

Speaker 2: I actually stole that from one of the guys from the elevator business. We had him in actually presenting to our board shortly after the acquisition of Elevated back a couple of years ago. I actually stole that from one of the guys from the elevator business. i actually stole that from one of the guys from the elevator business We had him in actually presenting to our board shortly after the acquisition of Elevated back a couple of years ago. we had him in actually presenting to our board shortly after the acquisition of elevated back a couple of years ago

Speaker 3: Yeah. Yeah. yeah

Speaker 2: His words to our board was, "We'd found our forever home." I thought it was pretty good, so I grabbed it. His words to our board was, "We'd found our forever home." I thought it was pretty good, so I grabbed it. his words to our board was "we'd found our forever home." i thought it was pretty good so i grabbed it

Speaker 3: Very complimentary. Very complimentary. very complimentary

Speaker 2: Yeah. Yeah. yeah

Speaker 3: Yeah. They feel like they found their spot. Yeah. yeah They feel like they found their spot. they feel like they found their spot

Speaker 2: We have a lot of bandwidth. We have a lot of bandwidth. we have a lot of bandwidth

Speaker 3: Okay. Okay. okay

Speaker 2: We've got a lot of dry powder. Our balance sheet is in a great place. For us, that's our number one priority from when you think about how we're going to use our capital. We've got a lot of dry powder. we've got a lot of dry powder Our balance sheet is in a great place. our balance sheet is in a great place For us, that's our number one priority from when you think about how we're going to use our capital. for us that's our number one priority from when you think about how we're going to use our capital

Speaker 3: Yep Yep yep

Speaker 2: would be M&A. would be M&A. would be m&a

Speaker 3: Yep. Yep. yep

Speaker 2: We've been active in the market, buying back some shares as well. We've been active in the market, buying back some shares as well. we've been active in the market buying back some shares as well

Speaker 3: Okay. All right. That's good color. I know we're out of time, but thank you very much, Russ. Okay. okay All right. all right That's good color. that's good color I know we're out of time, but thank you very much, Russ. i know we're out of time but thank you very much russ

Speaker 2: Yeah. Thank you. Yeah. yeah Thank you. thank you

Speaker 3: I really appreciate it. I really appreciate it. i really appreciate it