Thank you, Dan. Good morning, everyone.

I'm joined by Jamal and Bernie. And as you know, we go directly to questions.

So Dan is going to give you instructions, and then we'll take your questions.

So Mark, just wondering if you can give us a sense of how the scaling up of your M&A capacity has been going this year. And how are you feeling in terms of -- do you have adequate capacity for continued growth for 2018 at this point?

Blair, we've got Bernie on the line, so we might as well go directly to him for responses relating to M&A.

So last quarter, I think we said that we were going to be increasing the number of headcount for M&A and we, in fact, did ramp up quite a bit, and so pretty much on target to where we wanted it to be. And since then, our activity has increased dramatically, so it's a nice thing to see.

I don't think that we're going to be increasing dramatically from here in terms of the headcount. It's going to increase, decrease slightly here and there.

But I think we're pretty well set for 2018, but it's hard to tell.

So it's sort of still launching an experiment, Blair. We want to see what happens when we've added all these new people and some new processes.

And once we've got feedback, then you use that feedback to give you ideas on what to do next. So I think it's a waiting period for us.

Okay, great. Second question, just quickly on Japan.

Any update on how that partnership is progressing?

They're actually visiting with us right now. We're doing our M&A session are off-site.

Things are going reasonably well. We're filling the funnel and we got our fingers crossed that one of the many companies that they're talking to will at some stage want to sell.

Okay, great. And then just last one for me, Mark.

As you look at the overall company, the scale of the business now, are there other areas of CSU operations that you think you could get more benefit out of from economies of scale or any opportunities you would see for off-shoring some of your expenses to maintain or improve your margins?

So we are the anti-economies of scale company. We believe in small teams outperforming large teams, and so given the choice of taking a 200-person business and buffing it up into 2 smaller ones, we would much prefer to do that and believe that the benefits are there as opposed to ramming businesses together, firing a bunch of people and moving a bunch of work offshore.

So I don't think you'll see any of the benefits that you were talking about.

Mark, or I guess, any of the guys, can you talk a little bit -- presumably you're now in your 2018 planning cycle. Could you talk about what you've heard back from the businesses at this point in terms of how they're thinking about organic growth as well as maybe any larger organic investment initiatives?

Or is it all purely focused still on M&A?

Over to you, numbers guy.

I mean, I think we say the same thing every time this year that the numbers we get from the groups that are around organic growth are positive. But if you ask me what the -- as a betting man, you ask me what the numbers will be next quarter, I'd bet you they'd be down from what they are today.

So it's a positive outlook. We also have the benefit of FX next year and so when I'm looking at what they're forecasting organic growth for '18, it's not FX adjusted and then it's quite a favorable adjustment especially the euro year-over-year.

But if you're asking the question are we only focused on the M&A and not organic growth, I would say that's not the case. I would say Harris has specific objectives and goals of organic growth, Volaris does and I'm sure about the other groups that we are not just an M&A-focused organization.

So there are dedicated full-time people who coordinate initiatives at a number of the operating groups, Paul. So for some people, it's their full-time endeavor and what they live and breathe.

So that tends to -- that kind of focus tends to hopefully get you results.

Great. Bernie, I know you like to keep stats.

Maybe you could help us out with this one. In the last 6 months, could you sort of classify how those acquisitions looked in terms of how many of those were either top 1 or 2 in their verticals in terms of landing a new beachhead, a new market versus market consolidation plays?

I don't have those off the top of my head. I think about 50%.

50% of the acquisitions that we have been making have been tightly integrated into our existing operations and the other 50% are stand-alone operations, we can tell you that. Whether or not they're beachheads into new verticals, we have gone to some new areas.

I'm not going to start going through the list, but there are some new areas in telecoms, some engineering areas as well that we can go on ahead and try to look around to see if there are some add-on acquisition to tuck into or at least associate themselves with existing companies that we have now. But it's really hard.

It's not a crisp number that I can give you.

Fair enough. And just one last quick one for me.

On a SaaS basis in terms of businesses that are either a subscription-driven business, where is that percentage looking like these days?

I don't think we've mentioned that in ages, Paul. It doesn't really sort of influence our thinking on whether a business is interesting or not.

I believe that you're hosting your internal M&A conference today with some of your teams. Just hoping if you can share any of the key themes that you might discuss at the conference.

I think we've talked about it before. We're trying to push down M&A further inside the organization and so it's an education conference as much as anything else.

We're talking about whatever new revelations or discoveries we've had over the course of the last years that we believe should be broadly communicated amongst the people who are working on acquisitions. And then it's best practices, recounting what worked and what didn't over the course of the last several ones.

Bernie, anything else?

No, I think you hit it. That's right.

Do you think will any of the teams bring up the current valuation environment and how it factors into the thinking?

I mean, they always say that it's hard to buy stuff at attractive prices. I don't think they've ever not said that.

Maybe after -- during The Great Recession, they might not have said it for a year. But I think instead they had a different line.

It was something like, no one's selling right now because it's a terrible market. That was the one here, I remember.

Okay. Shifting to the results.

In the MD&A, disclosed that there's a relatively large increase in the contingent consideration, I think it's up to $4.2 million. And then you attributed to an increase in revenue forecast at acquisitions.

What changed to drive the increase? And then would you make -- going forward, would you make any changes to your forecasting processes to adjust for that?

Yes, I mean, there was a -- something within the earnout agreement with a specific acquisition, and if they hit their targets, that we would have to pay them X amount of the revenue above a certain target, and they overachieved what we expected on day of acquisition then, it was obviously less, and said they overachieved. In terms of forecasting, if we had known it, then maybe we...

Or we would have.

Yes, right. Exactly.

It was a surprise, but it was a nice surprise.

Yes. It was a nice surprise.

We paid out the amount. As a result of us paying out the amount, it also means, though, that we have a higher recurring revenue stream and so we'll recover that amount over time.

Yes, these things happen, right? It's just they overachieved.

Okay. So it sounds like a positive one-off.

Nothing systemic -- no systemic trend there?

Although -- it's interesting, Paul, when we look at the SaaS for the M&A and we look at our forecasting ability, on an individual basis it's not particularly good. On a portfolio basis, it's not bad at all.

The intriguing thing, though, is we use a multi-scenario approach to forecasting and I'm struck by how frequently, even outside of our outlier forecast, we end up with actual performance, both at the low and the high end of the outliers. And so you do get a real spread on these things, and this happened to be a spread on the upside.

That's interesting. In regards to M&A this quarter, it looks like the frequency is -- or the number of deals has increased quite a bit, but it seems like the average size has decreased.

Why do you think that is? And then could that reflect lower purchase multiples versus what you've done historically?

I don't see that the average price has decreased, not from the numbers that I see. So I think we're pretty much at the same level, so that's okay.

And I don't think we discussed multiples on the call so...

Mark, you mentioned adding new M&A processes when you're talking about ramping up the M&A headcount. Can you elaborate a bit about what those processes are, and what kind of early wins you're seeing?

That's kind of proprietary. We're trying to do M&A on a scale, which I can't think of more than 2 or 3 companies that have done it.

And so what we learned, we don't really want to share and would like to keep internal.

Fair enough. And so maybe moving on to the fact you're moving down the M&A to the business units.

Can you talk a bit about what percentage of M&A historically has been sourced from the business units and the percentage from the M&A team and kind of how you see that rolling out over the next couple of years?

Bernie, I don't think we've ever looked at the stats, have we?

No, no.

So general observation would be the people running the businesses have relationships. They have relationships with competitors and with adjacent products that they meet through their customers, and those will always be things they get faster then nurtured better by the business unit managers than anyone else inside their organization.

Obviously, we'll use the skills and capabilities of the M&A group, but that's always been where it's been at. And the use of BD people, people smiling and dialing, has probably been -- we did some of it in the early days.

We used to do direct mail, we used to do some telephone, but it's more common now than it has ever been in the past.

We still do get some sourcing from investment bankers.

Oh, yes.

And through headquarters and we disseminate through to the operating groups.

Yes, investment bankers are very important to us. They're involved in a very high proportion of the transactions, even when they're independent owner operated type businesses, and they serve a useful role.

When there's a banker involved, we know it's really for sale as opposed to maybe for sale and you can save yourself a lot of time. And they tend to give comfort to the vendors, so that they know what's normal and what's not normal because most vendors don't sell multiple times, they just sell once in their lives.

So the bankers serve an important role, but they are expensive. And if you're selling your single largest asset and you're willing to build a relationship with the buyer and get comfortable over time, then we often see that there aren't bankers involved in those sorts of transactions.

Mark, as your stock price moves higher, is that a risk to your ability to attract and retain M&A talent to the extent your new members now have to acquire your stock at higher prices. How do you think about that?

I'm going to be with 100-and-something of them later today, I'll ask them. It's -- I don't like the multiples that I see in the market generally right now.

I think there are many highly overvalued companies out there. And when the market gets as high as it is right now, I think it's a very tough place to be investing your capital.

And when we ask employees to do that as part of their bonus program, it doesn't make me feel good.

Mark, just kind of curious what you're thinking today if you look forward as to -- what's the reasonable sustainable growth rate for this business here if we look out the next 5 years?

It's a tough one to call, Richard. It really depends on how well the acquisition engine works.

So talk to me in about 4 years, I'll be able to tell you.

Fair enough. This one's for Jamal, though.

If we look at IFRS 15, I think more people are talking about this now if you kind of look forward here next year. What do you think just kind of the broad impact is going to be on your numbers here?

I'm sure you guys are running that analysis right now.

Yes, we don't have crisp enough numbers to put into the MD&A yet or the financials, but what's coming out right now, the P&L impact is not going to be material in my mind. Just a few things are going one way, a few things offsetting it the other way.

The impact on the balance sheet might be a little bit larger in terms of what the deferred revenue number might be. But the annual impact on the P&L, I'm not expecting a material change.

Okay. And then the last one...

Just to comment on IFRS. The changes can have profound impacts on software companies.

I think investors and people in general need to be very, very careful about this. We did a bit of an exercise to say if we were buying a company and that company had worked hard to use the change in IFRS to make their numbers look good, how good could they make them look?

And we think that they can probably move the needle by 7% to 10% on the kind of companies that we buy. So there's lots of sloppiness and room for games playing in this rule change.

Okay. And just last one for either Mark, Bernie or Jamal.

Can you give us a flavor for the environment today for transactions? If it's sort of tougher than it was last year?

Same? Easier?

I still get the feedback from the M&A guys that it's a tough environment. Again, I think it's the same message I gave last time I was on the call.

It's the portfolio companies, private equity firms that are also trying to do their own kind of roll-ups in whatever industry they're in. And a bunch of copycats are popping up as well, trying to do something similar to what we've done in the past.

So still plenty of competition out there, makes it hard for our guys, but we still manage to get some very good, solid acquisitions done over the course of the last year or so.

Mark, you mentioned that you don't really focus on whether an M&A target is a SaaS business or a license business, and I'm just curious on that. I know that the economics of a SaaS business can sometimes be less favorable.

But if you buy a license business, wouldn't that increase the risk that you'll have to invest in a major platform rewrite at some point in the future?

I don't see why. I would have thought that SaaS was just as likely to require a major rewrite at some point.

Okay, fair enough. And then maybe in terms of your experiment scaling up the M&A team, has that been confined primarily to North America?

Or have you been doing that internationally as well with Robin and the team?

It's been happening across-the-board. We do have operations in Europe and Australia.

And as we push capital deployment down through the ranks, the people at the BU level want the M&A staff with them, so they can go out and do their thing, and so it has been international, [ Richard ].

Then, finally, any update you can provide in terms of the pipeline of larger opportunities? Clearly, you haven't had any luck on that front, but has there been a pipeline -- has there been activity there?

You try and look at everything you can because sometimes there'll be a special situation that gives you an opportunity, and we're getting pretty good coverage at the large opportunities in our CRM system and -- but we're only being invited to look at a tiny number. Sorry, the levels of leverage that we're seeing applied to LBOs of these companies right now are just astonishing.

It's the nontraditional lenders are getting into it and are driving multiples up to 7 or 8x EBIT and often it's a forecasted EBIT for these businesses.

Thank you, Dan. Appreciate it.

Thank you, everyone, for joining the meeting this morning, and look forward to talking to you next quarter. Bye-bye now.