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The Business Journal’s 2016 and 2017 lists of fastest-growing privately held firms sported a statistical anomaly.

In both years we found exactly 157 small, midsize and large companies that met the main metric: at least 15% sales growth over a two-year period.

This year, we tallied 148 companies. This slightly smaller cadre of expanding businesses reported sales to $26.5 billion, about 40% higher than last year’s $19 billion.

The companies reporting sales above $100 million are finding ways to keep the double-digit growth going—even the biggest among them:

• Irvine-based Golden State Foods, $7.2 billion in sales, 19% two-year growth. It’s controlling higher ingredient and trucking costs by running its own fleet, and establishing a nimble subsidiary, Quality Custom Distribution Inc., to gain entree with smaller customers and diversify from its reliance on McDonald’s Corp.

• Steve Jones took Santa Ana-based Allied Universal to $5.4 billion, 155% growth in the two-year period, by being acquisitive. The chief executive also embraces technology; robots are joining his armada of 200,000-plus worldwide employees. And of course if you’re going to grow like Allied, it helps to be in a market, security, at the right time: intellectual property theft, workplace violence, terrorism and reductions in local law enforcement have all been a boon to Jones’ company.

“Executives are thinking about keeping their people safe in their work environment and what can damage their brands,” Jones told the Business Journal last year. “That keeps CEOs up at night.”

• Orange-based SA Recycling saw 152% growth in the last two years to $1.6 billion. It lost its founder and patriarch, George Adams, this June. He was 93 and started the predecessor company, Orange County Steel Salvage, in 1973. SA today is one of the biggest scrap metal recycling companies in the U.S.

George Adams Jr., who is now chief executive, told the Recycling Today website that the most important thing his father taught him “was to never give up, to never quit. No matter what happened, he just got back up and started swinging. My dad didn’t know what it was [like] to lose because he would never give up, therefore, he couldn’t lose.”

And no one knows how Adams and his people did it better than his banker. Richard Cabrera, now an executive Vice President at Umpqua Bank, lent Adams money 20 years ago when he ran a much smaller operation (see separate story, page 5).

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Cabrera credits company culture for one. “They’re really hardworking people, highly talented people,” Cabrera observed. In a mature business, they’re “a participant in global trade. They buy domestically and sell internationally,” Cabrera said.

And son George Adams Jr. “is a national authority in scrap metal recycling.”

M&A Flourishing

Mergers and acquisitions or roll-up strategies are flourishing here as elsewhere. The bigs don’t have to grow organically, capital is plentiful and entrepreneurs are willing sellers. The latter needs more than the 92 pages of this issue to explore why family-owned and other private business owners are opting for the exits more these days.

For openers, private companies face greater challenges to manage growth independently. Add to that, the 2017 Tax Cuts and Jobs Act is a nice inducement to exit.

The roster of 148 companies put up an equally impressive 33% pop in local payrolls, from 16,276 to 21,583 employees. More than a few of the companies we spoke with talked early and often about their most precious asset—human capital.

Of course there are always a few companies we don’t uncover and a few that choose to stay undercover—please tell us if you know members of either group. Also know that the thoroughbreds are ranked by percentage increase in sales.

The Business Journal research team, led by Meghan Kliewer, also provides each company’s local employment numbers. The lists begin on page 38, the features on pages 1, 6, 24, 26 and 28.

Big Companies

We found 23 bigs—one fewer than last year, of $100 million-plus revenue—and they combined for about $23.6 billion in sales, up 53%. Their payrolls swelled about 27%.

Matthew Blake’s Newport Beach-based staffing company Nexem Corp. got to nine figures in a hurry, just three years. At 1,933% two-year growth, it’s easily our speed of the speed among the biggest steeds (see story, page 1).

Andrea Klein’s Rand Technology Inc. took a little longer to get here. Klein began in sales and the electronics broker turned business owner in 1992. But the 24 months ended June show slow and steady can win the race of the swiftest. The distributor of electronics parts and recycled components grew her top line 160% to $112 million, good for No. 2 among the bigs (see story, page 6).

Brea-based meat distributor West Coast Prime Meats LLC had a good year as the industry vets figured out that being able to deliver their beef, lamb and poultry just in time, is just right for the top line.

The founders, who also began Claim Jumper Restaurants, steered their business to a juicy 35% sales bump, No. 11 and a new entrant to the fastest-growing, large private companies roster (see story, page 1).

Also Bigly:

• 92-year-old homebuilder Warmington Group of Cos. posted 55% growth to $203 million; the Costa-Mesa based builder leapfrogged from No. 19 to No. 7. Its current OC development is Canopy at Esencia, which is part of the Rancho Mission Viejo Co.’s new master-planned community near San Juan Capistrano.

• Other real estate-related companies joining Warmington include commercial developer and investor Bill Passo’s Passco Cos., 87% growth good for No. 6 on the list, and that makes 42 years of deal-making for founder Passo; and Tustin-based home lender New American Funding, where husband-and-wife team Rick and Patty Arvielo grew revenues 34% to $486 million.

• No. 23 Dendreon Pharmaceuticals LLC should have a speeding bullet by its name. The Seal Beach-based drugmaker has a new well-heeled parent, new marketing strategy and international expansion (China) on its mind for its treatment for prostate cancer.

Midsize and Small

We also split the list into small companies reporting under $10 million (see page 54), and midsize companies revenue between $10 million and $99.9 million (see page 42). The 48 companies in the small category grew sales 75% over the last 24 months to $248 million. The 77 middies combined for $2.6 billion in revenue, up about 63%, and hired about 2,000 additional locals, up 46% to 6,393.

• Sonendo Inc. topped the middies with an eye-popping 2,083% growth at the Laguna Hills-based maker of GentleWave, a device and new way to treat a root canal. The device’s development was initially funded by Olav Bergheim's Laguna Hills-based family office and accelerator Fjord Ventures; it received Food and Drug Administration approval in 2015.

“Sales were a little slow in ’17,” said Chief Talent Officer Roy Chen, an industry vet who came over from Yorba Linda-based Nobel Biocare. “But this year GentleWave’s taken off like a rocket.”

The company targets endodontists who specialize in root canal treatment; believe it or not, it’s a $4 billion global market.

“We’re still ramping up, we employ now 110 locally,” Chen said. That’s up from 79 two years ago.

It was good enough for $13 million in sales for the 12 months ended June 30, and No. 1 among midsize companies on the list.

Chen pointed out how fortunate the company was to have a patient founding investor—far from Silicon Valley and much further from being a publicly-owned company judged in three-month intervals. GentleWave was in development for at least ten years.

The list also featured:

• Midsize Ahtna Design-Build Inc. at No. 2, 510% two-year growth in its construction management business, yet another real estate-related company enjoying an extended boom (see story, page 24).

• MatterHackers Inc. is a Foothill Ranch-based grower in a burgeoning segment, 3D printing. It grew sales 158% to $13 million, good for No. 11 among midsized businesses (see story, page 26).

• We featured No. 30, Tevora Business Solutions Inc., in a front page story in the Business Journal’s Sept. 3 issue. The company’s revenue hit $37 million for the 12 months ended June 30, and 72% two-year growth. Not bad, when your trade is hacking.

“We have a 100% track record of hacking into anything,” Chief Executive Ray Zadjmool said.

• The saying one person’s misery is another man’s fortune applies to No. 1 among the small companies—Recall Masters Inc. programming and auto-market specialist Chris Miller and a few longtime colleagues came up with a database to help owners of cars under recall. Sales at the self-funded business are up 531% to $6.5 million, employment up fivefold from 7 to 35 (see story, page 28).

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