Fountain Valley-based Kingston Technology Co., a maker of memory products for computers and consumer electronics, has surpassed the Newport Beach-based parent of Pacific Life Insurance Co. to become the largest privately held company in the county, according to this week’s Business Journal list.
Kingston saw 2010 revenue of $6.5 billion, up 59% from a year earlier after a slump in prices for memory chips gave way to a surge that boosted sales at the company.
The $2.4 billion in added revenue easily was the biggest by dollar amount on our list—the centerpiece of an issue dedicated to private companies.
Kingston’s revenue gain by percentage was second only to No. 50 Santa Ana-based Stearns Lending Inc., a mortgage lender that saw a 62% rise to $249.6 million last year.
The surge allowed Kingston to easily outpace No. 2 Pacific Mutual Holding Co., parent company of Pacific Life and other subsidiaries.
Pacific Mutual saw an impressive 8% gain to $5.8 billion in revenue last year, but it wasn’t enough to keep pace with Kingston.
Impact
• Headquarters: Fountain Valley
• Business: memory, data storage products
• 2010 revenue: $6.5 billion, up 59%
• 2011 private company rank: No. 1
• 2010 rank: No. 2
How big of a shift is it? Pacific Mutual has held the top spot consecutively since 1994.
“Sometimes things really fall into place,” said Mark Leathem, Kingston’s vice president of corporate marketing (see related story, page 1).
The challenge for Kingston this year will be to keep the top private company crown. The company now has a $700 million revenue lead over Pacific Mutual.
If Kingston maintains its 2010 growth rate, it would have no problem staying on top. But the company’s outlook for 2011 is more tempered with supply uncertainty in Japan and more moderate demand seen this year.
Pacific Mutual, meanwhile, is enjoying a rebound of its own from the life insurance industry’s dark days after the bailout of American International Group Inc. in late 2008. The move brought scrutiny of all insurers, including Pacific Life, the dominant business of Pacific Mutual.
During the financial crisis, “We scaled back our growth and wanted to preserve capital,” Pacific Life Chief Financial Officer Khanh Tran said in an earlier Business Journal interview.
In the past couple of years, Pacific Life benefited from a surging stock market and uptick in revenue from life insurance policies.
In all, the 75 private companies on our list saw a big rebound in sales last year with an 11% gain to $55.5 billion in combined revenue.
A subtle bounce that started in 2009 went into overdrive last year.
On our list a year ago, the 75 largest private companies saw 2009 revenue rise a modest 0.3%.
In 2008, the companies on our list saw a 5% drop in revenue, reversing five years of gains.
Of course, Kingston drove much of 2010’s gain.
Without Kingston in the mix, the 74 other companies on this year’s list saw 2010 revenue rise nearly 7% to $49 billion.
Hiring is up at the companies on our list. But, as with the larger economy, hiring is following revenue gains at a more measured pace.
The 75 companies on our list employ 37,955 people in the county, up 3.7% from a year earlier.
That tops the county’s overall 12-month job gain in March of 1%, according to the state Employment Development Department.
In a shift, private companies actually grew local jobs at a faster pace than they did at their operations around the country and globe.
Companywide employment at the 75 companies was up nearly 3% to 177,835 people.
On many of our lists, companies tend to add jobs at a faster pace outside the county given higher costs here.
No. 16 Del Taco LLC was a big local gainer, adding 306 people in the past 12 months, a 31% gain to 1,296 local employees.
The gains came after Del Taco emerged as a stand-alone company last year after years as part of Nashville-based Sagittarius Brands Inc.
The separation allowed Del Taco to debut on our private companies list this year.
With the move, Del Taco added people at its Lake Forest headquarters, which recently was expanded in space by about 30%.
Universal Services
The biggest local employment gainer by actual number of people added was No. 38 Santa Ana-based Universal Services of America, which added 524 local workers, a 45% gain.
The company provides security and building maintenance services to real estate owners. It saw $298 million in 2010 revenue, up 26%.
Universal Services followed the list’s trend of slower growth elsewhere with company employment rising 5% to 10,549 people.
“The growth in revenue and personnel at Universal Services of America can be attributed to our continued success with our organic growth, as well as the successful integration of our acquisition strategy,” said Steve Jones, co-chief executive of Universal Services of America. “For 2011, we are forecasting another year of 20% growth in revenue and the addition of approximately 4,000 new employees.”
The list, always a work in progress, saw a handful of new entries.
Del Taco is the highest-ranking newcomer. Next is No. 43 Irvine-based technology consultant Trace3 Inc. with 2010 revenue of $280 million, up 50% from a year earlier.
No. 48 Orange-based Westinghouse Digital LLC, a seller of flat TVs, debuted with $250 million in sales. No. 51 Orange-based Roth Staffing Cos. made the list with $242 million in 2010 revenue, up 14% from a year earlier.
No. 53 Newport Beach-based chipmaker Conexant Systems Inc. joined the list after shifting over from our public companies list with its April 19 acquisition by San Francisco private equity firm Golden Gate Private Equity Inc.
Download the 2011 OC’s LARGEST PRIVATELY HELD COs list (pdf)
