Orange County’s billion-dollar club isn’t so exclusive anymore.
The number of publicly traded companies based here that are valued at $1 billion or more nearly tripled in the past six years to 37 at the end of 2005.
At the end of 1999, during the technology boom, the county counted 14 public companies worth $1 billion or more.
“It’s been an evolutionary process,” said Anil Puri, dean of the College of Business and Economics at California State University, Fullerton. “It seems to be picking up momentum.”
There have been fluctuations along the way.
At the end of 2001, the billion-dollar club counted 23 companies. A year later, the group was down to 16 as the recession took hold and the last holdouts of the tech downturn fell.
Since 2003, the group has been on the upswing, growing to 27 by the end of that year and to 32 in 2004.
2005’s group of 37 is notable.
Los Angeles County, with a population more than three times OC’s, counts 53 public companies worth $1 billion or more. San Diego counts 16 companies worth $1 billion or more.
“OC has a very high quality of living,” said investor Charles “Chuck” Martin, who runs a hedge fund out of his Newport Beach-based Mont Pelerin Capital LLC. “And because management makes decisions on where to live, it seems many companies have grown from being small here to very substantial billion-dollar companies.”
The billion-dollar club, a stock index done for the Business Journal by Newport Beach-based Roth Capital Partners LLC (see page 6), goes into 2006 with some departures. One company dropped out late last month while three others are set to leave.
Cypress-based PacifiCare Health Systems Inc., which counted a recent market value of $7.9 billion, was bought in December by Minnesota’s UnitedHealth Group Inc.
Irvine’s Westcorp and publicly traded subsidiary WFS Financial Inc. are being bought by Charlotte, N.C.-based Wachovia Corp. for about $4 billion. The deal is set to close this quarter.
The third departing billion-dollar clubber is Aliso Viejo-based Fluor Corp., which is set to move its headquarters to Texas later this year.
The billion-dollar club includes several constants, including the two most valuable companies, Irvine chipmaker Broadcom Corp., with a recent market value of $16 billion, and drug maker Allergan Inc., also of Irvine, at $14 billion.
Broadcom held a commanding lead as the county’s most valuable company during the tech boom and then dropped below Allergan for a time during the bust.
Allergan has seen its market value triple since the late 1990s.
Broadcom has been on a roller coaster. In late 2000, the company was valued at $60 billion, a peak for any OC company. In late 2002, the chipmaker hit a low of $2.7 billion. This year, Broadcom’s shares are up about 50%.
Back in 1999, Broadcom and fellow communications chipmaker Newport Beach-based Conexant Systems Inc. dominated the billion-dollar club. Allergan and Aliso Viejo-based networking device maker QLogic Corp. also were prominent.
Others from the class of 1999 are gone.
Orange-based Bergen Brunswig Corp. was bought by AmeriSource Health Corp. in 2001 for $4.1 billion.
Fast-food chain operator CKE Restaurants Inc. dropped out after moving from Anaheim to Carpinteria, though the company still has major operations here.
Another from 1999, Newport Beach bond fund manager Pacific Investment Management Co., still is around after German insurer Allianz AG bought Pimco for $4.3 billion in 2000.
From 2000 to 2002, the major stock indexes plunged. Several local companies began to catch the acquisitive eyes of outsiders.
Costa Mesa-based Tickets.com Inc., which went public in 1999 and briefly joined the billion-dollar club, ended up posting huge losses. In early 2005, Major League Baseball’s Internet unit paid about $67 million to buy Tickets.com.
In 2004, Sicor Inc., an Irvine maker of generic and brand name drugs, took a $3.4 billion buyout from Israel’s Teva Pharmaceutical Industries Ltd.
Others filled the gaps. Apparel companies Oakley Inc. of Foothill Ranch, Anaheim-based Pacific Sunwear of California Inc. and Huntington Beach’s Quiksilver Inc. saw their valuations gain in recent years.
By 2005, the three companies boasted market values ranging from $1 billion to $2 billion.
The latest entry is Multi-Fineline Electronix Inc., an Anaheim maker of circuit boards for wireless phones and other devices.
After upping guidance last week, the company’s shares soared, bringing its market value to more than $1 billion.
The housing boom also played out in the billion-dollar club. This year’s group includes subprime mortgage lender New Century Financial Corp. and homebuilder Standard Pacific Corp., both of Irvine.
Another real estate entry: San Clemente’s Sunstone Hotel Investors Inc., an owner of hotels that returned to the public markets in 2004.
BILLION-DOLLAR CHANGES
Top companies by market value at year end, in billions
1999
– Broadcom $22
– Conexant Systems $13.5
– Allergan $5.4
– QLogic $4.8
– Quest Software $3.8
2002
– Allergan $7.5
– Broadcom $4.4
– QLogic $3.5
– Fidelity National $3
– Intersil $2.3
2005
– Broadcom $16.6
– Allergan $14.3
– PacifiCare $7.9
– Fluor $6.6
– Beckman Coulter $3.6
BILLION-DOLLAR HOPEFULS
Recent market value, in millions:
– Commercial Capital Bancorp $960
– William Lyon Homes $900
– Volcom $820
– Epicor Software $775
– TriZetto Group $720
