Perimeter Solutions, Inc. — Call Transcript 2025

Welcome to the Perimeter Solutions conference call and webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. If anyone should require operator assistance, please press star zero. As a reminder, this conference is being recorded. It's now my pleasure to turn the floor over to Seth Barker, Head of Investor Relations. Seth, please go ahead. Good morning, everyone, and welcome to Perimeter Solutions conference call to discuss our acquisition of Medical Manufacturing Technologies LLC, also known as MMT. Before we begin, I'd like to remind you that today's remarks may include forward-looking statements. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks, please review the cautionary language in our press release as well as our filings with the SEC. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including Adjusted EBITDA. The reconciliation of and other information regarding these items can be found in our press release and investor presentation, both of which will be available on our website. Today's call is being recorded. A replay of this call will be available on the investor relations section of Perimeter Solutions' website. At this time, I would like to turn the call over to Perimeter Solutions' Chief Executive Officer, Haitham Khouri. Thank you, Seth. Good morning. We appreciate everyone's time on shorter notice this morning to discuss our agreement to acquire MMT. I'll start with key transaction points on slide three. We're acquiring MMT for $685 million in cash, including certain tax benefits. MMT is a leading provider of precision machinery and associated aftermarket consumables, parts, and services used in the manufacturing of minimally invasive medical devices, including advanced catheters and guidewires. Nearly all MMT's revenue is from proprietary products, and approximately half of MMT's revenue is generated from the aftermarket. MMT is expected to generate approximately $140 million of revenue and $50 million of EBITDA on a full-year basis in 2025. We expect to fund the transaction with $500 million of new secured debt financing and approximately $185 million of cash on hand. The transaction is expected to close in the first quarter of 2026, subject to regulatory approval. I'll use most of my time this morning to discuss MMT's fit with Perimeter's three key operational pillars, summarized on slide four. Our first pillar is business quality. Our goal is to build Perimeter into an owner of exceptionally high-quality industrial businesses with specific target economic characteristics. MMT checks this box. First, MMT is a leader in a highly specialized industry where quality and reliability are paramount to customer success. Second, the business has a track record of high single-digit to low double-digit organic growth, driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. Third, MMT has a large and growing installed base, which must be serviced with aftermarket consumables, spare parts, and services that are almost always proprietary. Fourth, MMT has a long, successful track record of tuck-in M&A, which we expect to continue. These characteristics have driven MMT's strong margins and returns on tangible capital. Our second pillar is the rigorous application of our Value Driver operating strategy. This strategy is built on constantly providing our customers with increased value and, in doing so, earning the right to drive profitable growth with our customers. These results are evident at our existing Fire Safety and Specialty Products businesses, where we've invested heavily to maximize the value we provide customers and earn the right to drive profitable new business, productivity improvements, and value-based pricing. MMT is an excellent fit with our strategy. The company's machinery, parts, consumables, and services are critical to zero-defect customer workflows and compliance with stringent regulatory standards. Despite their critical and highly engineered nature, MMT's average consumables price is approximately $70, and its average spare part price, excuse me, is approximately $160, modest relative to their value. We expect to accelerate investment into MMT, deliver excellent service to our customers, and earn the right to share in the resulting value creation. Our third operational pillar is our decentralized operating structure. MMT will operate as a standalone business within our decentralized structure, where managers have operating autonomy to run their businesses, accountability to deliver results, and incentives to think and act like owners because they are compensated like owners. Moving to slide five, our approach to MMT will mirror our approach at Perimeter, where we applied our Value Driver-based operating strategy to a high-quality business in a decentralized structure. As illustrated on the left-hand side of the slide, this drove significant Adjusted EBITDA and cash flow growth at Perimeter between the end of 2021 and the LTM period. MMT represents a very similar opportunity. First, an exceptionally high-quality business with clear industry leadership, strong organic growth, and an attractive starting margin profile. Second, an excellent fit for our Value Driver-based operating model with highly engineered proprietary products that are critical to customer success but represent a de minimis portion of customer costs. And third, a natural fit into our decentralized operating model built around autonomy, accountability, and alignment. As such, we're confident that the outcome at MMT will mirror that at Perimeter and result in meaningful equity value creation for our shareholders. With that, I'll turn the call over to Kyle. Thanks, Haitham. I'll start with an overview of MMT before we move into transaction details. MMT is an end-to-end manufacturing solution partner to the world's leading medical device OEMs. The company supports the manufacturing of lifesaving interventional devices such as catheters, guidewires, and stents. MMT serves its customers through the entire device lifecycle, from conceptualization to commercial ramp and through high-volume production. In the design and development phase, MMT application engineers partner with customer engineers to iterate on medical device designs, support the manufacturing of prototypes, and ensure upfront validation and regulatory compliance. The engineered machinery MMT develops and the manufacturing process they help design are then often specified into the regulatory filings with the FDA. MMT then assists its customers with the commercial production ramp by supplying highly engineered manufacturing machinery with rigorous quality control to ensure regulatory compliance and scale production. In the high-volume production phase, MMT serves this engineered machinery installed base with consumables, parts, and services. The company's customer base includes the largest blue-chip medical device manufacturing OEMs, with whom MMT enjoys long-tenured, deep, and broad relationships. For the company's top 10 customers, MMT enjoys a 15-year average relationship tenure, sells multiple solution types into each customer, and sells to an average of 15 sites per customer. Turning to the next slide, approximately 50% of MMT's revenue is generated by OEM engineered machinery, and approximately 50% is generated from the aftermarket. On the machinery side, MMT's highly engineered systems typically have useful lives of 10 to 15 years, and the installed base has grown to roughly 12,000 units across MMT's product lines. On the aftermarket side, MMT's proprietary aftermarket components are specified in the OEM machinery's manuals, which in turn form an important element of the customer's quality management systems. The company's consumables typically average around $70, and their parts around $160. The aftermarket opportunity tied to an initial equipment sale provides a long tail of parts and consumables revenue. Turning to the installed base, which grows from OEM sales of new machines that in turn serves as the basis of aftermarket sales. Since 2016, MMT's installed base has grown at a roughly 5% CAGR, which we believe is a reasonable approximation for volume growth. As Haitham noted earlier, this organic growth has been driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. We believe these trends are likely to continue going forward. Turning to the transaction economics on slide nine, the purchase price for MMT is $685 million in cash. MMT is expected to generate approximately $50 million of Adjusted EBITDA, which implies a purchase price multiple of approximately 14 times Adjusted EBITDA. We believe this is an attractive entry point relative to the growth we expect going forward. We plan to fund the transaction with $500 million of new secured debt and $185 million of cash on hand. On a pro forma basis at closing, we expect total debt will be roughly $1.2 billion, and net debt will be just over $1 billion. We expect pro forma leverage of approximately 2.7 times net debt to combined Adjusted EBITDA, which we believe will be well supported by the cash generation capability of our combined business. We note that the transaction is being financed without the issuance of equity, and that we expect to retain ample liquidity and balance sheet flexibility following closing. Overall, the company's financial posture remains strong post-acquisition. We are excited about this transaction and its potential to provide a new asset on which we can drive value creation through our Operational Value Drivers. We expect it will be meaningfully value-creating for Perimeter shareholders and will further strengthen our long-term strategic positioning. And most importantly, the entire Perimeter team looks forward to welcoming MMT's teammates to Perimeter and working with them to invest in and support their customers' missions. With that, I'll turn it over to the operator for Q&A. Thank you. And now we'll be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we pull for questions. Our first question today is coming from Josh Spector from UBS. Your line is now live. Good morning. It's Chris Perrella on for Josh. A couple of questions on the deal. As I think about both parts of MMT, the equipment and the aftermarket, is there an appreciable difference in the growth outlook for that and also the margin profile? Hey, good morning, Chris. It's Haitham. Growth outlook-wise, they're quite similar because one drives the other. Engineered machinery sales, which is the OEM portion of the business, grows your installed base, and on a volumetric basis, your aftermarket sales grow with growth in your installed base primarily. On a margin basis, generally speaking, with this type of business, folks are earning higher margins in the aftermarket than the OE side. That's consistent here, although not dramatically or appreciable. Okay. And then a question on the capital intensity of the business. I know you guys are relatively capital-light. Does this transaction fit into that, or is there some spend that needs to happen on the MMT side once you get it within the portfolio? Hey, Chris, it's Kyle. Thanks for the question. I think you actually framed this correctly, that we are relatively low capital intensity, and we believe that MMT largely fits that model as well. This is going to be a few million dollars of CapEx against the $50 million of EBITDA, and we don't see any need to put a large step up of CapEx initially into the business. All right. And then one final question just on the FDA specifications. Is all the material, including the aftermarket, specced in? And how big of a moat does that drive around the business? And also, is there any cross-selling opportunity with the printed circuit board business you guys had acquired earlier or building up? We're substantially all of the aftermarket component business, both consumables and the spares, are specced in to the machinery, and that ultimately all does tie back to regulatory specification driven by the FDA. On the second part of your question, no. MMT is completely distinct from IMS and will certainly remain that way in our decentralized model. All right. Thank you. Appreciate the time this morning. Yeah, you bet. Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Dan Kutz from Morgan Stanley. Your line is now live. Hey, thanks. Good morning and congratulations on the deal. Thanks, Dan. So just kind of looking at the slide with the installed base, it looks like a pretty kind of steady growth market, but I'm just wondering if there's any kind of OEM cyclicality where maybe the customers are building and then kind of the market's absorbing that capacity, or their customers are absorbing that capacity. It was really, if we're thinking about the growth driver of the installed base, will that pretty closely track, I guess, the number of procedures that are happening? Yeah, just wondering if you can help us a little bit more think about some of the macro drivers for the longer-term growth outlook. Thanks. Hey, Dan, it's Kyle. I think you've identified exactly the right drivers here. When you think about the ultimate end market for this business, it is the procedures that's going out there. And those are relatively steady over time. Awesome. And then it's kind of my understanding that the components and the equipment that you're selling to your customers, that MMT covers a lot of what's needed for the customers to ultimately manufacture their products. But it's also my understanding that maybe it's not the fully comprehensive suite of everything they would need. So I guess the question is around any appetite to potentially look for opportunities to acquire some of the parts or components or machinery that could broaden the suite of products that MMT offers. I think I've seen that there was another competitor that they'd acquired somewhat recently. So yeah, it's really a question around, similar to the IMS business, any appetite to potentially broaden the product suite at MMT and kind of drive towards a more full suite portfolio offering. Thanks. Yeah, hey, Dan. The short answer is yes. The team at MMT has done a very nice job over the past years with tuck-in M&A, broadening their suite of products, delivering customers with a more comprehensive offering, which is quite valuable to customers, and we absolutely would love for them to keep doing that going forward, and we feel pretty good that they're going to be successful at it. Awesome. And then maybe just one last quick one on kind of the transaction economics. Anything you'd share around the calculus around the cash versus debt mix? I know you guys have a heavy cash balance on the balance sheet, but it's also a big component of the deal. So yeah, just anything you'd share around the cash versus debt mix. And then also, the company was arguably pretty under-levered before. Leverage looks a little bit healthier now. How do you think about where the capital structure and where the balance sheet is as it pertains to incremental M&A? Sorry to ask you about the potential for the next deal, the deal you just announced, the big deal. But yeah, just any thoughts you'd share there? Yeah, Dan, it's Kyle. On the mix of cash and debt, we were really managing to what we thought was an appropriate cash balance that would give us all the flexibility we needed going forward. So that was a pretty simple calculus for us. On the leverage front, this does bring us to a point where we feel like we're more in the appropriately leveraged camp at this point. We were pretty clear, I think, that one times net leverage was lower than we wanted to be. At this leverage area, we're in a very comfortable spot where we feel good about it while maintaining flexibility if something comes up that looks just really good. I'll actually take that out into two pieces. We have add-on acquisition opportunities, particularly in the IMS business that we talk about frequently, and that will continue at pace. If we think about the platform piece, we have some work to do here on MMT, which we're super excited about, and so that'll probably be our focus, but we'll always look at anything that comes our way opportunistically. Awesome. All really helpful. Thanks a lot. I'll turn it back. Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is a follow-up from Josh Spector from UBS. Your line is now live. Hi guys. It's Chris again. Just a quick one. With the number of tuck-ins MMT is done, how tightly integrated from your perspective is that? And is there plenty of wood to chop there in terms of fully integrating those tuck-ins? Yeah. Hey, Chris. The team at MMT has done a very nice job, I would say, appropriately integrating the acquisitions while not losing, I call it, the entrepreneurial spirit at each that allows them to serve the customer best. And therefore, we'll go in and we'll look at it, but our bias is to not do a whole lot incremental because, again, these guys have done a very nice job. Okay. Wonderful. Thank you. Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Haitham for any further closing comments. Just thank you to everybody for joining us on relatively short notice. Thank you as always to our investors for the support, and thank you and welcome to the MMT team. Thank you. That does conclude today's teleconference webcast. You may just connect your line at this time and have a wonderful day. We thank you for your participation today.

Speaker 4: Welcome to the Perimeter Solutions conference call and webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. If anyone should require operator assistance, please press star zero. As a reminder, this conference is being recorded. It's now my pleasure to turn the floor over to Seth Barker, Head of Investor Relations. Seth, please go ahead. Welcome to the Perimeter Solutions conference call and webcast. welcome to the perimeter solutions conference call and webcast At this time, all participants are in listen-only mode. at this time all participants are in listen-only mode A question-and-answer session will follow the formal presentation. a question-and-answer session will follow the formal presentation You may be placed into question queue at any time by pressing star one on your telephone keypad. you may be placed into question queue at any time by pressing star one on your telephone keypad If anyone should require operator assistance, please press star zero. if anyone should require operator assistance please press star zero As a reminder, this conference is being recorded. as a reminder this conference is being recorded It's now my pleasure to turn the floor over to Seth Barker, Head of Investor Relations. it's now my pleasure to turn the floor over to seth barker head of investor relations Seth, please go ahead. seth please go ahead

Speaker 3: Good morning, everyone, and welcome to Perimeter Solutions conference call to discuss our acquisition of Medical Manufacturing Technologies LLC, also known as MMT. Before we begin, I'd like to remind you that today's remarks may include forward-looking statements. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For a discussion of these risks, please review the cautionary language in our press release as well as our filings with the SEC. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including Adjusted EBITDA. Good morning, everyone, and welcome to Perimeter Solutions conference call to discuss our acquisition of Medical Manufacturing Technologies LLC, also known as MMT. good morning everyone and welcome to perimeter solutions conference call to discuss our acquisition of medical manufacturing technologies llc also known as mmt Before we begin, I'd like to remind you that today's remarks may include forward-looking statements. before we begin i'd like to remind you that today's remarks may include forward-looking statements These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied. these statements are subject to various risks and uncertainties that could cause actual results to differ materially from those expressed or implied For a discussion of these risks, please review the cautionary language in our press release as well as our filings with the SEC. for a discussion of these risks please review the cautionary language in our press release as well as our filings with the sec We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. we undertake no obligation to update any forward-looking statements whether as a result of new information future events or otherwise The company would also like to advise you that during the call, we will be referring to non-GAAP financial measures, including Adjusted EBITDA. the company would also like to advise you that during the call we will be referring to non-gaap financial measures including adjusted ebitda The reconciliation of and other information regarding these items can be found in our press release and investor presentation, both of which will be available on our website. Today's call is being recorded. A replay of this call will be available on the investor relations section of Perimeter Solutions' website. At this time, I would like to turn the call over to Perimeter Solutions' Chief Executive Officer, Haitham Khouri. The reconciliation of and other information regarding these items can be found in our press release and investor presentation, both of which will be available on our website. the reconciliation of and other information regarding these items can be found in our press release and investor presentation both of which will be available on our website Today's call is being recorded. today's call is being recorded A replay of this call will be available on the investor relations section of Perimeter Solutions' website. a replay of this call will be available on the investor relations section of perimeter solutions' website At this time, I would like to turn the call over to Perimeter Solutions' Chief Executive Officer, Haitham Khouri. at this time i would like to turn the call over to perimeter solutions' chief executive officer haitham khouri

Speaker 2: Thank you, Seth. Good morning. We appreciate everyone's time on shorter notice this morning to discuss our agreement to acquire MMT. I'll start with key transaction points on slide three. We're acquiring MMT for $685 million in cash, including certain tax benefits. MMT is a leading provider of precision machinery and associated aftermarket consumables, parts, and services used in the manufacturing of minimally invasive medical devices, including advanced catheters and guidewires. Nearly all MMT's revenue is from proprietary products, and approximately half of MMT's revenue is generated from the aftermarket. MMT is expected to generate approximately $140 million of revenue and $50 million of EBITDA on a full-year basis in 2025. We expect to fund the transaction with $500 million of new secured debt financing and approximately $185 million of cash on hand. Thank you, Seth. thank you seth Good morning. good morning We appreciate everyone's time on shorter notice this morning to discuss our agreement to acquire MMT. we appreciate everyone's time on shorter notice this morning to discuss our agreement to acquire mmt I'll start with key transaction points on slide three. i'll start with key transaction points on slide three We're acquiring MMT for $685 million in cash, including certain tax benefits. we're acquiring mmt for $685 million in cash including certain tax benefits MMT is a leading provider of precision machinery and associated aftermarket consumables, parts, and services used in the manufacturing of minimally invasive medical devices, including advanced catheters and guidewires. mmt is a leading provider of precision machinery and associated aftermarket consumables parts and services used in the manufacturing of minimally invasive medical devices including advanced catheters and guidewires Nearly all MMT's revenue is from proprietary products, and approximately half of MMT's revenue is generated from the aftermarket. nearly all mmt's revenue is from proprietary products and approximately half of mmt's revenue is generated from the aftermarket MMT is expected to generate approximately $140 million of revenue and $50 million of EBITDA on a full-year basis in 2025. mmt is expected to generate approximately $140 million of revenue and $50 million of ebitda on a full-year basis in 2025 We expect to fund the transaction with $500 million of new secured debt financing and approximately $185 million of cash on hand. we expect to fund the transaction with $500 million of new secured debt financing and approximately $185 million of cash on hand The transaction is expected to close in the first quarter of 2026, subject to regulatory approval. I'll use most of my time this morning to discuss MMT's fit with Perimeter's three key operational pillars, summarized on slide four. Our first pillar is business quality. Our goal is to build Perimeter into an owner of exceptionally high-quality industrial businesses with specific target economic characteristics. MMT checks this box. First, MMT is a leader in a highly specialized industry where quality and reliability are paramount to customer success. Second, the business has a track record of high single-digit to low double-digit organic growth, driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. Third, MMT has a large and growing installed base, which must be serviced with aftermarket consumables, spare parts, and services that are almost always proprietary. The transaction is expected to close in the first quarter of 2026, subject to regulatory approval. the transaction is expected to close in the first quarter of 2026 subject to regulatory approval I'll use most of my time this morning to discuss MMT's fit with Perimeter's three key operational pillars, summarized on slide four. i'll use most of my time this morning to discuss mmt's fit with perimeter's three key operational pillars summarized on slide four Our first pillar is business quality. our first pillar is business quality Our goal is to build Perimeter into an owner of exceptionally high-quality industrial businesses with specific target economic characteristics. our goal is to build perimeter into an owner of exceptionally high-quality industrial businesses with specific target economic characteristics MMT checks this box. mmt checks this box First, MMT is a leader in a highly specialized industry where quality and reliability are paramount to customer success. first mmt is a leader in a highly specialized industry where quality and reliability are paramount to customer success Second, the business has a track record of high single-digit to low double-digit organic growth, driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. second the business has a track record of high single-digit to low double-digit organic growth driven by increasing adoption of minimally invasive procedures increasing device complexity and a trend towards machinery outsourcing Third, MMT has a large and growing installed base, which must be serviced with aftermarket consumables, spare parts, and services that are almost always proprietary. third mmt has a large and growing installed base which must be serviced with aftermarket consumables spare parts and services that are almost always proprietary Fourth, MMT has a long, successful track record of tuck-in M&A, which we expect to continue. These characteristics have driven MMT's strong margins and returns on tangible capital. Our second pillar is the rigorous application of our Value Driver operating strategy. This strategy is built on constantly providing our customers with increased value and, in doing so, earning the right to drive profitable growth with our customers. These results are evident at our existing Fire Safety and Specialty Products businesses, where we've invested heavily to maximize the value we provide customers and earn the right to drive profitable new business, productivity improvements, and value-based pricing. MMT is an excellent fit with our strategy. The company's machinery, parts, consumables, and services are critical to zero-defect customer workflows and compliance with stringent regulatory standards. Fourth, MMT has a long, successful track record of tuck-in M&A, which we expect to continue. fourth mmt has a long successful track record of tuck-in m&a which we expect to continue These characteristics have driven MMT's strong margins and returns on tangible capital. these characteristics have driven mmt's strong margins and returns on tangible capital Our second pillar is the rigorous application of our Value Driver operating strategy. our second pillar is the rigorous application of our value driver operating strategy This strategy is built on constantly providing our customers with increased value and, in doing so, earning the right to drive profitable growth with our customers. this strategy is built on constantly providing our customers with increased value and in doing so earning the right to drive profitable growth with our customers These results are evident at our existing Fire Safety and Specialty Products businesses, where we've invested heavily to maximize the value we provide customers and earn the right to drive profitable new business, productivity improvements, and value-based pricing. these results are evident at our existing fire safety and specialty products businesses where we've invested heavily to maximize the value we provide customers and earn the right to drive profitable new business productivity improvements and value-based pricing MMT is an excellent fit with our strategy. mmt is an excellent fit with our strategy The company's machinery, parts, consumables, and services are critical to zero-defect customer workflows and compliance with stringent regulatory standards. the company's machinery parts consumables and services are critical to zero-defect customer workflows and compliance with stringent regulatory standards Despite their critical and highly engineered nature, MMT's average consumables price is approximately $70, and its average spare part price, excuse me, is approximately $160, modest relative to their value. We expect to accelerate investment into MMT, deliver excellent service to our customers, and earn the right to share in the resulting value creation. Our third operational pillar is our decentralized operating structure. MMT will operate as a standalone business within our decentralized structure, where managers have operating autonomy to run their businesses, accountability to deliver results, and incentives to think and act like owners because they are compensated like owners. Moving to slide five, our approach to MMT will mirror our approach at Perimeter, where we applied our Value Driver-based operating strategy to a high-quality business in a decentralized structure. Despite their critical and highly engineered nature, MMT's average consumables price is approximately $70, and its average spare part price, excuse me, is approximately $160, modest relative to their value. despite their critical and highly engineered nature mmt's average consumables price is approximately $70 and its average spare part price excuse me is approximately $160 modest relative to their value We expect to accelerate investment into MMT, deliver excellent service to our customers, and earn the right to share in the resulting value creation. we expect to accelerate investment into mmt deliver excellent service to our customers and earn the right to share in the resulting value creation Our third operational pillar is our decentralized operating structure. our third operational pillar is our decentralized operating structure MMT will operate as a standalone business within our decentralized structure, where managers have operating autonomy to run their businesses, accountability to deliver results, and incentives to think and act like owners because they are compensated like owners. mmt will operate as a standalone business within our decentralized structure where managers have operating autonomy to run their businesses accountability to deliver results and incentives to think and act like owners because they are compensated like owners Moving to slide five, our approach to MMT will mirror our approach at Perimeter, where we applied our Value Driver-based operating strategy to a high-quality business in a decentralized structure. moving to slide five our approach to mmt will mirror our approach at perimeter where we applied our value driver-based operating strategy to a high-quality business in a decentralized structure As illustrated on the left-hand side of the slide, this drove significant Adjusted EBITDA and cash flow growth at Perimeter between the end of 2021 and the LTM period. MMT represents a very similar opportunity. First, an exceptionally high-quality business with clear industry leadership, strong organic growth, and an attractive starting margin profile. Second, an excellent fit for our Value Driver-based operating model with highly engineered proprietary products that are critical to customer success but represent a de minimis portion of customer costs. And third, a natural fit into our decentralized operating model built around autonomy, accountability, and alignment. As such, we're confident that the outcome at MMT will mirror that at Perimeter and result in meaningful equity value creation for our shareholders. With that, I'll turn the call over to Kyle. As illustrated on the left-hand side of the slide, this drove significant Adjusted EBITDA and cash flow growth at Perimeter between the end of 2021 and the LTM period. as illustrated on the left-hand side of the slide this drove significant adjusted ebitda and cash flow growth at perimeter between the end of 2021 and the ltm period MMT represents a very similar opportunity. mmt represents a very similar opportunity First, an exceptionally high-quality business with clear industry leadership, strong organic growth, and an attractive starting margin profile. first an exceptionally high-quality business with clear industry leadership strong organic growth and an attractive starting margin profile Second, an excellent fit for our Value Driver-based operating model with highly engineered proprietary products that are critical to customer success but represent a de minimis portion of customer costs. second an excellent fit for our value driver-based operating model with highly engineered proprietary products that are critical to customer success but represent a de minimis portion of customer costs And third, a natural fit into our decentralized operating model built around autonomy, accountability, and alignment. and third a natural fit into our decentralized operating model built around autonomy accountability and alignment As such, we're confident that the outcome at MMT will mirror that at Perimeter and result in meaningful equity value creation for our shareholders. as such we're confident that the outcome at mmt will mirror that at perimeter and result in meaningful equity value creation for our shareholders With that, I'll turn the call over to Kyle. with that i'll turn the call over to kyle

Speaker 5: Thanks, Haitham. I'll start with an overview of MMT before we move into transaction details. MMT is an end-to-end manufacturing solution partner to the world's leading medical device OEMs. The company supports the manufacturing of lifesaving interventional devices such as catheters, guidewires, and stents. MMT serves its customers through the entire device lifecycle, from conceptualization to commercial ramp and through high-volume production. In the design and development phase, MMT application engineers partner with customer engineers to iterate on medical device designs, support the manufacturing of prototypes, and ensure upfront validation and regulatory compliance. The engineered machinery MMT develops and the manufacturing process they help design are then often specified into the regulatory filings with the FDA. MMT then assists its customers with the commercial production ramp by supplying highly engineered manufacturing machinery with rigorous quality control to ensure regulatory compliance and scale production. Thanks, Haitham. thanks haitham I'll start with an overview of MMT before we move into transaction details. i'll start with an overview of mmt before we move into transaction details MMT is an end-to-end manufacturing solution partner to the world's leading medical device OEMs. mmt is an end-to-end manufacturing solution partner to the world's leading medical device oems The company supports the manufacturing of lifesaving interventional devices such as catheters, guidewires, and stents. the company supports the manufacturing of lifesaving interventional devices such as catheters guidewires and stents MMT serves its customers through the entire device lifecycle, from conceptualization to commercial ramp and through high-volume production. mmt serves its customers through the entire device lifecycle from conceptualization to commercial ramp and through high-volume production In the design and development phase, MMT application engineers partner with customer engineers to iterate on medical device designs, support the manufacturing of prototypes, and ensure upfront validation and regulatory compliance. in the design and development phase mmt application engineers partner with customer engineers to iterate on medical device designs support the manufacturing of prototypes and ensure upfront validation and regulatory compliance The engineered machinery MMT develops and the manufacturing process they help design are then often specified into the regulatory filings with the FDA. the engineered machinery mmt develops and the manufacturing process they help design are then often specified into the regulatory filings with the fda MMT then assists its customers with the commercial production ramp by supplying highly engineered manufacturing machinery with rigorous quality control to ensure regulatory compliance and scale production. mmt then assists its customers with the commercial production ramp by supplying highly engineered manufacturing machinery with rigorous quality control to ensure regulatory compliance and scale production In the high-volume production phase, MMT serves this engineered machinery installed base with consumables, parts, and services. The company's customer base includes the largest blue-chip medical device manufacturing OEMs, with whom MMT enjoys long-tenured, deep, and broad relationships. For the company's top 10 customers, MMT enjoys a 15-year average relationship tenure, sells multiple solution types into each customer, and sells to an average of 15 sites per customer. Turning to the next slide, approximately 50% of MMT's revenue is generated by OEM engineered machinery, and approximately 50% is generated from the aftermarket. On the machinery side, MMT's highly engineered systems typically have useful lives of 10 to 15 years, and the installed base has grown to roughly 12,000 units across MMT's product lines. In the high-volume production phase, MMT serves this engineered machinery installed base with consumables, parts, and services. in the high-volume production phase mmt serves this engineered machinery installed base with consumables parts and services The company's customer base includes the largest blue-chip medical device manufacturing OEMs, with whom MMT enjoys long-tenured, deep, and broad relationships. the company's customer base includes the largest blue-chip medical device manufacturing oems with whom mmt enjoys long-tenured deep and broad relationships For the company's top 10 customers, MMT enjoys a 15-year average relationship tenure, sells multiple solution types into each customer, and sells to an average of 15 sites per customer. for the company's top 10 customers mmt enjoys a 15-year average relationship tenure sells multiple solution types into each customer and sells to an average of 15 sites per customer Turning to the next slide, approximately 50% of MMT's revenue is generated by OEM engineered machinery, and approximately 50% is generated from the aftermarket. turning to the next slide approximately 50% of mmt's revenue is generated by oem engineered machinery and approximately 50% is generated from the aftermarket On the machinery side, MMT's highly engineered systems typically have useful lives of 10 to 15 years, and the installed base has grown to roughly 12,000 units across MMT's product lines. on the machinery side mmt's highly engineered systems typically have useful lives of 10 to 15 years and the installed base has grown to roughly 12,000 units across mmt's product lines On the aftermarket side, MMT's proprietary aftermarket components are specified in the OEM machinery's manuals, which in turn form an important element of the customer's quality management systems. The company's consumables typically average around $70, and their parts around $160. The aftermarket opportunity tied to an initial equipment sale provides a long tail of parts and consumables revenue. Turning to the installed base, which grows from OEM sales of new machines that in turn serves as the basis of aftermarket sales. Since 2016, MMT's installed base has grown at a roughly 5% CAGR, which we believe is a reasonable approximation for volume growth. As Haitham noted earlier, this organic growth has been driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. We believe these trends are likely to continue going forward. On the aftermarket side, MMT's proprietary aftermarket components are specified in the OEM machinery's manuals, which in turn form an important element of the customer's quality management systems. on the aftermarket side mmt's proprietary aftermarket components are specified in the oem machinery's manuals which in turn form an important element of the customer's quality management systems The company's consumables typically average around $70, and their parts around $160. the company's consumables typically average around $70 and their parts around $160 The aftermarket opportunity tied to an initial equipment sale provides a long tail of parts and consumables revenue. the aftermarket opportunity tied to an initial equipment sale provides a long tail of parts and consumables revenue Turning to the installed base, which grows from OEM sales of new machines that in turn serves as the basis of aftermarket sales. turning to the installed base which grows from oem sales of new machines that in turn serves as the basis of aftermarket sales Since 2016, MMT's installed base has grown at a roughly 5% CAGR, which we believe is a reasonable approximation for volume growth. since 2016 mmt's installed base has grown at a roughly 5% cagr which we believe is a reasonable approximation for volume growth As Haitham noted earlier, this organic growth has been driven by increasing adoption of minimally invasive procedures, increasing device complexity, and a trend towards machinery outsourcing. as haitham noted earlier this organic growth has been driven by increasing adoption of minimally invasive procedures increasing device complexity and a trend towards machinery outsourcing We believe these trends are likely to continue going forward. we believe these trends are likely to continue going forward Turning to the transaction economics on slide nine, the purchase price for MMT is $685 million in cash. MMT is expected to generate approximately $50 million of Adjusted EBITDA, which implies a purchase price multiple of approximately 14 times Adjusted EBITDA. We believe this is an attractive entry point relative to the growth we expect going forward. We plan to fund the transaction with $500 million of new secured debt and $185 million of cash on hand. On a pro forma basis at closing, we expect total debt will be roughly $1.2 billion, and net debt will be just over $1 billion. We expect pro forma leverage of approximately 2.7 times net debt to combined Adjusted EBITDA, which we believe will be well supported by the cash generation capability of our combined business. Turning to the transaction economics on slide nine, the purchase price for MMT is $685 million in cash. turning to the transaction economics on slide nine the purchase price for mmt is $685 million in cash MMT is expected to generate approximately $50 million of Adjusted EBITDA, which implies a purchase price multiple of approximately 14 times Adjusted EBITDA. mmt is expected to generate approximately $50 million of adjusted ebitda which implies a purchase price multiple of approximately 14 times adjusted ebitda We believe this is an attractive entry point relative to the growth we expect going forward. we believe this is an attractive entry point relative to the growth we expect going forward We plan to fund the transaction with $500 million of new secured debt and $185 million of cash on hand. we plan to fund the transaction with $500 million of new secured debt and $185 million of cash on hand On a pro forma basis at closing, we expect total debt will be roughly $1.2 billion, and net debt will be just over $1 billion. on a pro forma basis at closing we expect total debt will be roughly $1.2 billion and net debt will be just over $1 billion We expect pro forma leverage of approximately 2.7 times net debt to combined Adjusted EBITDA, which we believe will be well supported by the cash generation capability of our combined business. we expect pro forma leverage of approximately 2.7 times net debt to combined adjusted ebitda which we believe will be well supported by the cash generation capability of our combined business We note that the transaction is being financed without the issuance of equity, and that we expect to retain ample liquidity and balance sheet flexibility following closing. Overall, the company's financial posture remains strong post-acquisition. We are excited about this transaction and its potential to provide a new asset on which we can drive value creation through our Operational Value Drivers. We expect it will be meaningfully value-creating for Perimeter shareholders and will further strengthen our long-term strategic positioning. And most importantly, the entire Perimeter team looks forward to welcoming MMT's teammates to Perimeter and working with them to invest in and support their customers' missions. With that, I'll turn it over to the operator for Q&A. We note that the transaction is being financed without the issuance of equity, and that we expect to retain ample liquidity and balance sheet flexibility following closing. we note that the transaction is being financed without the issuance of equity and that we expect to retain ample liquidity and balance sheet flexibility following closing Overall, the company's financial posture remains strong post-acquisition. overall the company's financial posture remains strong post-acquisition We are excited about this transaction and its potential to provide a new asset on which we can drive value creation through our Operational Value Drivers. we are excited about this transaction and its potential to provide a new asset on which we can drive value creation through our operational value drivers We expect it will be meaningfully value-creating for Perimeter shareholders and will further strengthen our long-term strategic positioning. we expect it will be meaningfully value-creating for perimeter shareholders and will further strengthen our long-term strategic positioning And most importantly, the entire Perimeter team looks forward to welcoming MMT's teammates to Perimeter and working with them to invest in and support their customers' missions. and most importantly the entire perimeter team looks forward to welcoming mmt's teammates to perimeter and working with them to invest in and support their customers' missions With that, I'll turn it over to the operator for Q&A. with that i'll turn it over to the operator for q&a

Speaker 4: Thank you. And now we'll be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we pull for questions. Our first question today is coming from Josh Spector from UBS. Your line is now live. Thank you. thank you And now we'll be conducting a question-and-answer session. and now we'll be conducting a question-and-answer session If you'd like to be placed in the question queue, please press star one on your telephone keypad. if you'd like to be placed in the question queue please press star one on your telephone keypad A confirmation tone will indicate your line is in the question queue. a confirmation tone will indicate your line is in the question queue You may press star two if you'd like to remove your question from the queue. you may press star two if you'd like to remove your question from the queue For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. for participants using speaker equipment it may be necessary to pick up your handset before pressing star one One moment, please, while we pull for questions. one moment please while we pull for questions Our first question today is coming from Josh Spector from UBS. our first question today is coming from josh spector from ubs Your line is now live. your line is now live

Speaker 1: Good morning. It's Chris Perrella on for Josh. A couple of questions on the deal. As I think about both parts of MMT, the equipment and the aftermarket, is there an appreciable difference in the growth outlook for that and also the margin profile? Good morning. good morning It's Chris Perrella on for Josh. it's chris perrella on for josh A couple of questions on the deal. a couple of questions on the deal As I think about both parts of MMT, the equipment and the aftermarket, is there an appreciable difference in the growth outlook for that and also the margin profile? as i think about both parts of mmt the equipment and the aftermarket is there an appreciable difference in the growth outlook for that and also the margin profile

Speaker 2: Hey, good morning, Chris. It's Haitham. Growth outlook-wise, they're quite similar because one drives the other. Engineered machinery sales, which is the OEM portion of the business, grows your installed base, and on a volumetric basis, your aftermarket sales grow with growth in your installed base primarily. On a margin basis, generally speaking, with this type of business, folks are earning higher margins in the aftermarket than the OE side. That's consistent here, although not dramatically or appreciable. Hey, good morning, Chris. hey good morning chris It's Haitham. it's haitham Growth outlook-wise, they're quite similar because one drives the other. growth outlook-wise they're quite similar because one drives the other Engineered machinery sales, which is the OEM portion of the business, grows your installed base, and on a volumetric basis, your aftermarket sales grow with growth in your installed base primarily. engineered machinery sales which is the oem portion of the business grows your installed base and on a volumetric basis your aftermarket sales grow with growth in your installed base primarily On a margin basis, generally speaking, with this type of business, folks are earning higher margins in the aftermarket than the OE side. on a margin basis generally speaking with this type of business folks are earning higher margins in the aftermarket than the oe side That's consistent here, although not dramatically or appreciable. that's consistent here although not dramatically or appreciable

Speaker 1: Okay. And then a question on the capital intensity of the business. I know you guys are relatively capital-light. Does this transaction fit into that, or is there some spend that needs to happen on the MMT side once you get it within the portfolio? Okay. okay And then a question on the capital intensity of the business. and then a question on the capital intensity of the business I know you guys are relatively capital-light. i know you guys are relatively capital-light Does this transaction fit into that, or is there some spend that needs to happen on the MMT side once you get it within the portfolio? does this transaction fit into that or is there some spend that needs to happen on the mmt side once you get it within the portfolio

Speaker 5: Hey, Chris, it's Kyle. Thanks for the question. I think you actually framed this correctly, that we are relatively low capital intensity, and we believe that MMT largely fits that model as well. This is going to be a few million dollars of CapEx against the $50 million of EBITDA, and we don't see any need to put a large step up of CapEx initially into the business. Hey, Chris, it's Kyle. hey chris it's kyle Thanks for the question. thanks for the question I think you actually framed this correctly, that we are relatively low capital intensity, and we believe that MMT largely fits that model as well. i think you actually framed this correctly that we are relatively low capital intensity and we believe that mmt largely fits that model as well This is going to be a few million dollars of CapEx against the $50 million of EBITDA, and we don't see any need to put a large step up of CapEx initially into the business. this is going to be a few million dollars of capex against the $50 million of ebitda and we don't see any need to put a large step up of capex initially into the business

Speaker 1: All right. And then one final question just on the FDA specifications. Is all the material, including the aftermarket, specced in? And how big of a moat does that drive around the business? And also, is there any cross-selling opportunity with the printed circuit board business you guys had acquired earlier or building up? All right. all right And then one final question just on the FDA specifications. and then one final question just on the fda specifications Is all the material, including the aftermarket, specced in? is all the material including the aftermarket specced in And how big of a moat does that drive around the business? and how big of a moat does that drive around the business And also, is there any cross-selling opportunity with the printed circuit board business you guys had acquired earlier or building up? and also is there any cross-selling opportunity with the printed circuit board business you guys had acquired earlier or building up

Speaker 2: We're substantially all of the aftermarket component business, both consumables and the spares, are specced in to the machinery, and that ultimately all does tie back to regulatory specification driven by the FDA. On the second part of your question, no. MMT is completely distinct from IMS and will certainly remain that way in our decentralized model. We're substantially all of the aftermarket component business, both consumables and the spares, are specced in to the machinery, and that ultimately all does tie back to regulatory specification driven by the FDA. we're substantially all of the aftermarket component business both consumables and the spares are specced in to the machinery and that ultimately all does tie back to regulatory specification driven by the fda On the second part of your question, no. on the second part of your question no MMT is completely distinct from IMS and will certainly remain that way in our decentralized model. mmt is completely distinct from ims and will certainly remain that way in our decentralized model

Speaker 1: All right. Thank you. Appreciate the time this morning. All right. all right Thank you. thank you Appreciate the time this morning. appreciate the time this morning

Speaker 5: Yeah, you bet. Yeah, you bet. yeah you bet

Speaker 4: Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Dan Kutz from Morgan Stanley. Your line is now live. Thank you. thank you As a reminder, that's star one to be placed in the question queue. as a reminder that's star one to be placed in the question queue Our next question is coming from Dan Kutz from Morgan Stanley. our next question is coming from dan kutz from morgan stanley Your line is now live. your line is now live

Speaker 6: Hey, thanks. Good morning and congratulations on the deal. Hey, thanks. hey thanks Good morning and congratulations on the deal. good morning and congratulations on the deal

Speaker 2: Thanks, Dan. Thanks, Dan. thanks dan

Speaker 6: So just kind of looking at the slide with the installed base, it looks like a pretty kind of steady growth market, but I'm just wondering if there's any kind of OEM cyclicality where maybe the customers are building and then kind of the market's absorbing that capacity, or their customers are absorbing that capacity. It was really, if we're thinking about the growth driver of the installed base, will that pretty closely track, I guess, the number of procedures that are happening? Yeah, just wondering if you can help us a little bit more think about some of the macro drivers for the longer-term growth outlook. Thanks. So just kind of looking at the slide with the installed base, it looks like a pretty kind of steady growth market, but I'm just wondering if there's any kind of OEM cyclicality where maybe the customers are building and then kind of the market's absorbing that capacity, or their customers are absorbing that capacity. so just kind of looking at the slide with the installed base it looks like a pretty kind of steady growth market but i'm just wondering if there's any kind of oem cyclicality where maybe the customers are building and then kind of the market's absorbing that capacity or their customers are absorbing that capacity It was really, if we're thinking about the growth driver of the installed base, will that pretty closely track, I guess, the number of procedures that are happening? it was really if we're thinking about the growth driver of the installed base will that pretty closely track i guess the number of procedures that are happening Yeah, just wondering if you can help us a little bit more think about some of the macro drivers for the longer-term growth outlook. yeah just wondering if you can help us a little bit more think about some of the macro drivers for the longer-term growth outlook Thanks. thanks

Speaker 5: Hey, Dan, it's Kyle. I think you've identified exactly the right drivers here. When you think about the ultimate end market for this business, it is the procedures that's going out there. And those are relatively steady over time. Hey, Dan, it's Kyle. hey dan it's kyle I think you've identified exactly the right drivers here. i think you've identified exactly the right drivers here When you think about the ultimate end market for this business, it is the procedures that's going out there. when you think about the ultimate end market for this business it is the procedures that's going out there And those are relatively steady over time. and those are relatively steady over time

Speaker 6: Awesome. And then it's kind of my understanding that the components and the equipment that you're selling to your customers, that MMT covers a lot of what's needed for the customers to ultimately manufacture their products. But it's also my understanding that maybe it's not the fully comprehensive suite of everything they would need. So I guess the question is around any appetite to potentially look for opportunities to acquire some of the parts or components or machinery that could broaden the suite of products that MMT offers. I think I've seen that there was another competitor that they'd acquired somewhat recently. So yeah, it's really a question around, similar to the IMS business, any appetite to potentially broaden the product suite at MMT and kind of drive towards a more full suite portfolio offering. Thanks. Awesome. awesome And then it's kind of my understanding that the components and the equipment that you're selling to your customers, that MMT covers a lot of what's needed for the customers to ultimately manufacture their products. and then it's kind of my understanding that the components and the equipment that you're selling to your customers that mmt covers a lot of what's needed for the customers to ultimately manufacture their products But it's also my understanding that maybe it's not the fully comprehensive suite of everything they would need. but it's also my understanding that maybe it's not the fully comprehensive suite of everything they would need So I guess the question is around any appetite to potentially look for opportunities to acquire some of the parts or components or machinery that could broaden the suite of products that MMT offers. so i guess the question is around any appetite to potentially look for opportunities to acquire some of the parts or components or machinery that could broaden the suite of products that mmt offers I think I've seen that there was another competitor that they'd acquired somewhat recently. i think i've seen that there was another competitor that they'd acquired somewhat recently So yeah, it's really a question around, similar to the IMS business, any appetite to potentially broaden the product suite at MMT and kind of drive towards a more full suite portfolio offering. so yeah it's really a question around similar to the ims business any appetite to potentially broaden the product suite at mmt and kind of drive towards a more full suite portfolio offering Thanks. thanks

Speaker 2: Yeah, hey, Dan. The short answer is yes. The team at MMT has done a very nice job over the past years with tuck-in M&A, broadening their suite of products, delivering customers with a more comprehensive offering, which is quite valuable to customers, and we absolutely would love for them to keep doing that going forward, and we feel pretty good that they're going to be successful at it. Yeah, hey, Dan. yeah hey dan The short answer is yes. the short answer is yes The team at MMT has done a very nice job over the past years with tuck-in M&A, broadening their suite of products, delivering customers with a more comprehensive offering, which is quite valuable to customers, and we absolutely would love for them to keep doing that going forward, and we feel pretty good that they're going to be successful at it. the team at mmt has done a very nice job over the past years with tuck-in m&a broadening their suite of products delivering customers with a more comprehensive offering which is quite valuable to customers and we absolutely would love for them to keep doing that going forward and we feel pretty good that they're going to be successful at it

Speaker 6: Awesome. And then maybe just one last quick one on kind of the transaction economics. Anything you'd share around the calculus around the cash versus debt mix? I know you guys have a heavy cash balance on the balance sheet, but it's also a big component of the deal. So yeah, just anything you'd share around the cash versus debt mix. And then also, the company was arguably pretty under-levered before. Leverage looks a little bit healthier now. How do you think about where the capital structure and where the balance sheet is as it pertains to incremental M&A? Sorry to ask you about the potential for the next deal, the deal you just announced, the big deal. But yeah, just any thoughts you'd share there? Awesome. awesome And then maybe just one last quick one on kind of the transaction economics. and then maybe just one last quick one on kind of the transaction economics Anything you'd share around the calculus around the cash versus debt mix? anything you'd share around the calculus around the cash versus debt mix I know you guys have a heavy cash balance on the balance sheet, but it's also a big component of the deal. i know you guys have a heavy cash balance on the balance sheet but it's also a big component of the deal So yeah, just anything you'd share around the cash versus debt mix. so yeah just anything you'd share around the cash versus debt mix And then also, the company was arguably pretty under-levered before. and then also the company was arguably pretty under-levered before Leverage looks a little bit healthier now. leverage looks a little bit healthier now How do you think about where the capital structure and where the balance sheet is as it pertains to incremental M&A? how do you think about where the capital structure and where the balance sheet is as it pertains to incremental m&a Sorry to ask you about the potential for the next deal, the deal you just announced, the big deal. sorry to ask you about the potential for the next deal the deal you just announced the big deal But yeah, just any thoughts you'd share there? but yeah just any thoughts you'd share there

Speaker 5: Yeah, Dan, it's Kyle. On the mix of cash and debt, we were really managing to what we thought was an appropriate cash balance that would give us all the flexibility we needed going forward. So that was a pretty simple calculus for us. On the leverage front, this does bring us to a point where we feel like we're more in the appropriately leveraged camp at this point. We were pretty clear, I think, that one times net leverage was lower than we wanted to be. At this leverage area, we're in a very comfortable spot where we feel good about it while maintaining flexibility if something comes up that looks just really good. I'll actually take that out into two pieces. We have add-on acquisition opportunities, particularly in the IMS business that we talk about frequently, and that will continue at pace. Yeah, Dan, it's Kyle. yeah dan it's kyle On the mix of cash and debt, we were really managing to what we thought was an appropriate cash balance that would give us all the flexibility we needed going forward. on the mix of cash and debt we were really managing to what we thought was an appropriate cash balance that would give us all the flexibility we needed going forward So that was a pretty simple calculus for us. so that was a pretty simple calculus for us On the leverage front, this does bring us to a point where we feel like we're more in the appropriately leveraged camp at this point. on the leverage front this does bring us to a point where we feel like we're more in the appropriately leveraged camp at this point We were pretty clear, I think, that one times net leverage was lower than we wanted to be. we were pretty clear i think that one times net leverage was lower than we wanted to be At this leverage area, we're in a very comfortable spot where we feel good about it while maintaining flexibility if something comes up that looks just really good. at this leverage area we're in a very comfortable spot where we feel good about it while maintaining flexibility if something comes up that looks just really good I'll actually take that out into two pieces. i'll actually take that out into two pieces We have add-on acquisition opportunities, particularly in the IMS business that we talk about frequently, and that will continue at pace. we have add-on acquisition opportunities particularly in the ims business that we talk about frequently and that will continue at pace If we think about the platform piece, we have some work to do here on MMT, which we're super excited about, and so that'll probably be our focus, but we'll always look at anything that comes our way opportunistically. If we think about the platform piece, we have some work to do here on MMT, which we're super excited about, and so that'll probably be our focus, but we'll always look at anything that comes our way opportunistically. if we think about the platform piece we have some work to do here on mmt which we're super excited about and so that'll probably be our focus but we'll always look at anything that comes our way opportunistically

Speaker 6: Awesome. All really helpful. Thanks a lot. I'll turn it back. Awesome. awesome All really helpful. all really helpful Thanks a lot. thanks a lot I'll turn it back. i'll turn it back

Speaker 4: Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is a follow-up from Josh Spector from UBS. Your line is now live. Thank you. thank you As a reminder, that's star one to be placed in the question queue. as a reminder that's star one to be placed in the question queue Our next question is a follow-up from Josh Spector from UBS. our next question is a follow-up from josh spector from ubs Your line is now live. your line is now live

Speaker 1: Hi guys. It's Chris again. Just a quick one. With the number of tuck-ins MMT is done, how tightly integrated from your perspective is that? And is there plenty of wood to chop there in terms of fully integrating those tuck-ins? Hi guys. hi guys It's Chris again. it's chris again Just a quick one. just a quick one With the number of tuck-ins MMT is done, how tightly integrated from your perspective is that? with the number of tuck-ins mmt is done how tightly integrated from your perspective is that And is there plenty of wood to chop there in terms of fully integrating those tuck-ins? and is there plenty of wood to chop there in terms of fully integrating those tuck-ins

Speaker 2: Yeah. Hey, Chris. The team at MMT has done a very nice job, I would say, appropriately integrating the acquisitions while not losing, I call it, the entrepreneurial spirit at each that allows them to serve the customer best. And therefore, we'll go in and we'll look at it, but our bias is to not do a whole lot incremental because, again, these guys have done a very nice job. Yeah. yeah Hey, Chris. hey chris The team at MMT has done a very nice job, I would say, appropriately integrating the acquisitions while not losing, I call it, the entrepreneurial spirit at each that allows them to serve the customer best. the team at mmt has done a very nice job i would say appropriately integrating the acquisitions while not losing i call it the entrepreneurial spirit at each that allows them to serve the customer best And therefore, we'll go in and we'll look at it, but our bias is to not do a whole lot incremental because, again, these guys have done a very nice job. and therefore we'll go in and we'll look at it but our bias is to not do a whole lot incremental because again these guys have done a very nice job

Speaker 1: Okay. Wonderful. Thank you. Okay. okay Wonderful. wonderful Thank you. thank you

Speaker 2: Thank you. Thank you. thank you

Speaker 4: We reached the end of our question and answer session. I'd like to turn the floor back over to Haitham for any further closing comments. We reached the end of our question and answer session. we reached the end of our question and answer session I'd like to turn the floor back over to Haitham for any further closing comments. i'd like to turn the floor back over to haitham for any further closing comments

Speaker 2: Just thank you to everybody for joining us on relatively short notice. Thank you as always to our investors for the support, and thank you and welcome to the MMT team. Just thank you to everybody for joining us on relatively short notice. just thank you to everybody for joining us on relatively short notice Thank you as always to our investors for the support, and thank you and welcome to the MMT team. thank you as always to our investors for the support and thank you and welcome to the mmt team

Speaker 4: Thank you. That does conclude today's teleconference webcast. You may just connect your line at this time and have a wonderful day. We thank you for your participation today. Thank you. thank you That does conclude today's teleconference webcast. that does conclude today's teleconference webcast You may just connect your line at this time and have a wonderful day. you may just connect your line at this time and have a wonderful day We thank you for your participation today. we thank you for your participation today