On today’s show we discuss the different types of revenue growth and their impact on company valuation. Our guest is Charlie DeLacey, the Vice President of Corporate Development and Strategy at the Kenan Advantage Group. Kenan is a $1.5 billion dollar transportation and logistics business.
Charlie is responsible for driving and shaping the strategy of Kenan Advantage Group, who has experienced 10-15% growth on an annual basis.
The types of growth discussed include organic and inorganic, and the return on capital each type of investment drives. When given the opportunity to grow the same amount of revenue through organic or inorganic, typically organic growth will drive greater value creation. However, there are other variables that must be considered such as time, capital requirements and execution risks. Listen as Charlie describes how to make the decision between organic and inorganic growth.
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Charlie responds to three key questions on the decision between organic growth and inorganic growth:
- Do different types of revenue growth earn different returns on capital?
- Is organic growth better than growth through acquisition?
- How should you decide between organic or inorganic growth?
Ultimately investments are being made that create value and generate a return equity value for shareholders. Listen as Charlie explains the different types of revenue growth, and how they impact the way your company is viewed.
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