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Freshly divorced from Daimler of Germany and with $62 billion in annual revenues, U.S. automaker Chrysler slots into third place on our list of America's Largest Private Companies, just behind top-ranked Koch Industries and second place Cargill. Chrysler, last publicly traded in 1998, prior to its ill-fated merger with Mercedes, is now majority-owned by private-equity firm Cerebus Capital Management. Cerebus also has a 51% stake in fifth-ranked GMAC Financial Services (General Motors owns the other 49%) and investments in two other companies (Tower Automotive and Mervyns) on this year's list of the largest private U.S. companies.
It is a safe bet that Chrysler, America's third-largest automaker, will not grace our private company list for too many years. In today's world of fast-moving capital, private investors buy distressed companies, attempt to revitalize them and try to cash in on their investment--either through a public offering or sale of all or parts of the company. Cerebus' $7.4 billion deal for Chrysler is one of the largest buyouts of a manufacturing company.
Slideshow: America's 25 Largest Private Companies Slideshow: America's Largest Private Companies: Newcomers Slideshow: America's Largest Private Technology Companies Slideshow: The World's 2,000 Largest Public Companies Slideshow: Highest Performing Global Companies
In contrast to Chrysler are numerous private companies that have been private over decades, where owners are less likely to take their companies public. Such owners--often descendants of the company founder--prefer the anonymity, freedom from achieving quarterly earnings expectations and reduced obligations to Sarbanes-Oxley reporting requirements. Private status is also a safe haven for low-margined unglamorous but important businesses--such as supermarkets, food wholesalers and other distributors. Big engineering and contracting companies often stay out of the public arena, because their revenues and profits can undergo big swings from year to year. In contrast, we have only 14 "technology" companies on this year's list.
Alongside such anciently private outfits as Mars and Publix Super Markets, our annual listing of America's Largest Private Companies includes well-known newcomers that either recently went private or passed our $1 billion revenue threshold for inclusion on our list. Among them are Dollar General, the $9.2 billion discount retailer that Kohlberg Kravis & Roberts and other investors took private last July, MGA Entertainment, the $2.5 billion doll and toy marketing company and Spanish-language broadcaster Univision Communications.
We lost a few companies from last year due to acquisitions, but only one to an initial public offering--Hertz Global Holdings, the auto-rental company, which went public in mid-November last year.
In addition to our $1 billion revenue requirement, the companies on our list have either too few shareholders to be required to file financial statements with the Securities and Exchange Commission, or shares whose ownership is restricted to some group, like family members or employees. We exclude foreign companies, companies that don't pay income taxes (like Mohegan Tribal Gaming Authority), mutually owned companies (like State Farm Insurance), companies with fewer than 100 employees and companies that are 50% or more owned by foreign or other private companies. We also leave out companies whose primary business is auto dealerships or real estate investment and/or management.
Wherever possible, our revenue figures for each company exclude sales of publicly traded subsidiaries. Data sources include Securities and Exchange Commission and regulatory filings, voluntary disclosure by the companies and estimates based on various sources.
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