Private Powerhouses
Going public is commonly thought of as the endgame for most companies.
But many of the world’s biggest and most influential businesses have gone through great lengths and endured great criticism to go the opposite rout – to stay private.
It’s a tactic that has certainly been successful for many, with several private U.S. companies raking in hundreds of billions of dollars in annual revenue without the regulatory and investor scrutiny associated with being a public company.
Private companies are more common than you might think. Non-public companies make up roughly 95 percent of the U.S. economy, according to some private market analysts.
One of the most talked-about private companies is Facebook, run by wunderkind Mark Zuckerberg. But as far as private companies stack up, the social networking site’s $1.8 billion revenue in 2010, and its reportedly $4 billion in revenue for 2011, are small change. Groupon, another infamous private company before it’s recent initial public offering, is a similar story. Its annual revenues for 2010 were $320 million — a drop in the bucket compared to larger private players.
So who are the biggest private powerhouses? Private market analysts at PrivCo have assembled a ranking of the country’s most lucrative private companies — ranked according to estimates of 2010 revenue. The list is being presented for the first time on CNBC.com.
By Jesse Bergman and Gennine Kelly
Posted 11 November 2011
10. Nationwide Mutual Insurance
2010 Revenue: $21 billion
One-Year Growth: 0.0%
Nationwide Mutual Insurance is one of the largest insurance and financial services companies in the world, with more than $135 billion in statutory assets.
In 2009, a wholly owned subsidiary of Nationwide, Nationwide Corp., purchased all of the outstanding shares of common stock of Nationwide Financial Services (NFS) that it did not already own. As a result, NFS became a wholly owned subsidiary of Nationwide and a private company.
Despite record-breaking home foreclosures throughout much of the U.S., the insurance giant didn’t lose any ground from 2009 to 2010.
Source: PrivCo, Nationwide
9. Ernst & Young
2010 Revenue: $21.3 billion
One-Year Growth: 0.2%
Considered one of the “big four” accounting firms, Ernst & Young employs 152,000 people worldwide.
This assurance, tax, transaction, and advisory services company was formed in 1989 by the merger of two accounting firms named after their founders, Arthur Young from Glasgow and Alwin C. Ernst of Cleveland.
Source: PrivCo, Ernst & Young, New York Times
8. Publix Supermarkets
2010 Revenue: $25.3 billion
One-Year Growth: 4.2%
Publix Supermarkets is the largest employee-owned and fastest-growing supermarket chain in the U.S. Founded in Winter Haven, Fla., in 1903, the company has expanded to 1,000 stores throughout Florida, Georgia, South Carolina, Alabama, and Tennessee.
Publix's common stock is not publicly traded on a stock exchange — the market price of its stock is determined by its board of directors each quarter. The supermarket chain has more than 96,000 stockholders, and more than 113,000 participants of its employee stock ownership plan.
Source: PrivCo, Publix
7. PricewaterhouseCoopers International
2010 Revenue: $27 billion
One-Year Growth: -0.3%
PricewaterhouseCoopers International recently regained its status as the world’s largest accounting and consulting firm. It is one of the “big four” accounting firms, and came together in 1998 as a result of the merger of Price Waterhouse and Coopers & Lybrand to create PricewaterhouseCoopers.
In 2010, the company formally shortened its brand name to PwC, although "PricewaterhouseCoopers" remains the full name of the global organization for legal purposes.
Source: PrivCo, Reuters, PwC website
6. Deloitte Touche Tohmatsu
2010 Revenue: $27 billion
One-Year Growth: 1.9%
Deloitte Touche Tohmatsu is one of the “big four” accounting agencies, and is second only to PwC in terms of revenue among accounting and consulting firms.
Deloitte employs 182,000 people in over 150 countries, and member firms serve more than 80 percent of the world's largest companies, as well as large national enterprises, public institutions, and successful fast-growing private companies.
Source: PrivCo, Reuters, Deloitte
5. Mars Inc.
2010 Revenue: $30 billion
One-Year Growth: 7.1%
Mars Inc. is known for its famous chocolate covered candies, M&M’s, and its $23 billion dollar acquisition of Wm. Wrigley Jr. Co. in 2008.
Warren Buffet’s publicly traded Berkshire Hathaway helped finance the multibillion-dollar transaction, and holds a minority equity investment in the Wrigley subsidiary.
Mars grew by 7 percent between 2009 and 2010 from rising food costs and through the expansion of the distribution footprint of Wrigley’s brand-name gum and confections.
Source: PrivCo, Mars, New York Times
4. Bechtel Corp.
2010 Revenue: $28 Billion
One-Year Growth: -9.4%
Bechtel is the largest engineering, construction, and project-management company in the U.S. The San Francisco-based company has been run by family members for four generations, and is well known for notable projects, such as: the Chunnel, which connects Paris and London, the Hoover Dam, the Boston “Big Dig” Central Artery/Tunnel, the renovation of the London Underground, and rebuilding infrastructure in Iraq.
Bechtel was directly impacted by the slowdown in the American economy and as a result the company experienced a negative 9.4 percent growth rate from 2009 to 2010.
Source: PrivCo, Bechtel
3. Chrysler
2010 Revenue: $42 billion
One-Year Growth: 45.7 percent
The automobile manufacturer’s turnaround story is remarkable, growing a whopping 46 percent from 2009 to 2010, under the leadership of Fiat’s Sergio Marchionne.
Fiat took majority control of Chrysler this year, after the automaker repaid $7.6 billion in loans to the U.S. and Canadian governments from its 2009 federal bailout. As a result, Chrysler won’t qualify to make this list next year, because Fiat is a publicly traded company.
Source: PrivCo, Reuters
2. Koch Industries
2010 Revenue: $102 Billion
One-Year Growth: 2.0%
Koch Industries is a business conglomerate with multiple subsidiaries that make well-known brands, including Quilted Northern, Angel Soft, and Brawny paper towels.
Brothers Charles and David Koch are very active behind the scenes in politics and, according to the Koch website, the company “encourages all citizens, including Tea Party members, to engage in civil discourse concerning the important public policy issues in the United States.”
Koch’s business has steadily increased through the years by increasing its energy exposure and by way of acquisitions, including the $21 billion acquisition of Georgia-Pacific.
Source: PrivCo, Koch Industries
1. Cargill
2010 Revenue: $120 Billion
One-Year Growth: 10.8%
Cargill is the wealthiest privately owned business in the U.S., established at the close of the American Civil War in 1865.
The company is an international producer and marketer of food, and agricultural and industrial products and services, including fertilizer, corn syrup, livestock feed, and fillers.
From 2009 to 2010, Cargill grew by almost 11 percent, due in part to higher food prices and recent acquisitions made in Asia, Korea, Brazil, and India.
Source: PrivCo, Cargill