Expert Perspective

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.

August 30, 2023

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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.

Vesna Brajkovic

Senior Editor

Vesna Brajkovic was a business journalist and the Senior Editor of Modern Distribution Management (MDM), the editorial and research department of NAW until October 2026. She joined MDM’s editorial team in 2023 after covering transportation and related industries as a trade magazine editor for seven years. At MDM, she provides in-depth market analysis and insights for the wholesale distribution sector through Premium-member content, including through articles, podcasts, research reports and more. She also serves as a co-host of the MDM Podcast and a moderator at NAW events and webinars.

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