MDM Podcast: Higher EBITDA Multiple Drivers - A McKinsey Keynote Preview - Modern Distribution Management

MDM Podcast: Higher EBITDA Multiple Drivers – A McKinsey Keynote Preview

McKinsey Partner Kevin Sachs previews his team’s SHIFT conference keynote on the differentiators of those who are convincing shareholders they are growing revenue faster, expanding margins and improving their capital leverage.
SHIFT Stage


What differentiates distribution companies with a high valuation apart from other distributors? Kevin Sachs, who co-leads the North American distribution sector practice for consulting firm McKinsey & Company, set out to answer this question. 

AT MDM’s SHIFT | The Future of Distribution conference, to be held Sept. 18-20 in Denver, Sachs will join McKinsey Partner Alex Abdelnour on stage to deliver a keynote presentation and dive deeply into the firm’s latest research findings on the drivers of higher EBITDA multiples. 

Kevin Sachs

But as a primer, Sachs joined MDM CEO Tom Gale this week to give MDM Podcast listeners a preview into findings that break down the ways distributors with high valuations differentiate themselves from their competitors. 

Sachs says higher valuation is driven by how successfully distributors are able to convince shareholders that a company is achieving three outcomes: 

  1. Faster revenue growth 
  2. Expanded profit margins
  3. More efficient leverage of working capital

Sachs and Abdelnour’s full research presentation at SHIFT will break down the different archetypes and characterizations of distributions that have achieved higher valuation. The pair will also share how those companies have been able to convince shareholders they merit a higher EBITDA multiple, and provide key takeaways. 

McKinsey & Company Partner Alex Abdelnour (left) and Senior Partner Kevin Sachs deliver the opening keynote at MDM’s 2022 SHIFT | The Future of Distribution Conference on Sept. 26, 2022 in Broomfield, Colorado. (MDM Photo)

What It Takes for an Organization to Transform

Sachs told Gale that the distribution companies he considers leaders in the industry all showcase the trait of continuous improvement in the effectiveness of sales processes, leveraging data to identify actions to take and leading a culture that drives efficient execution.

“The key thing that you find is the good ones continue to get better versus sitting on their laurels,” Sach says. 

His McKinsey colleague Greg Fern, Senior Partner at the firm’s Transformation practice, will be at SHIFT to explore how distributors can navigate change management in the context of transformation and performance improvement.

“He will share what are the insights that he, and we, have developed in terms of what it really takes to unlock that new of level of performance and get an organization to transform into change,” Sachs added. 

SHIFT attendees will kick off the conference with an assessment, and roundtable discussions will help them evaluate their digital capabilities, people capabilities, data analytics and sales process. The final session will be Fern’s transformation success workshop. There is still time to register for SHIFT. Visit the conference website to register and view of the full agenda.

Check out the full episode via the audio player above, and find all of our past MDM Podcast episodes here.

Related Posts

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.