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Video: How to Make (or Break) Shareholder Value in M&A

Video: How to Make (or Break) Shareholder Value in M&A

July 12, 2017

Most distribution executives came up through sales, and the original driver of shareholder value was to grow revenue and get larger. This is no longer true.

The distributor with the highest shareholder value, as measured by the EBITDA multiples that numerous buyers would be willing to pay, is a firm with these characteristics: organic growth two to three times that of competitors; an EBITDA margin of 10 percent of revenue or higher; growth from successful acquisitions and subsequent integrations; a clear value proposition; and professional management.

Read more about this in my latest article for MDM Premium, the Distribution M&A Playbook: Unlocking Shareholder Value.

The best way to create shareholder value is by providing authentic customer value. There are no shortcuts, and strategies like secretly raising prices only work in the short term.

Creating value isn’t the only thing you should be thinking about when preparing to sell your company; you should also be on the lookout for ways to destroy shareholder value, so you can avoid them. The easiest way to destroy shareholder value in an M&A transaction? Being dishonest about your financials, dead inventory or other issues in the early stages of the selling process.

We received a question about this after announcing the Distribution M&A Executive Workshop IRCG will be holding in partnership with Modern Distribution Management. Find out how dishonesty can have a direct impact on your company’s purchase price in the video below:

Join MDM and IRCG for the first-ever Distribution M&A Executive Workshop, Oct. 9-11, 2017, in Austin, TX. Learn more at

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