Our 25th annual survey of America’s largest private companies reflects the same turbulence that is rocking the publicly traded firms that make all the headlines. Seven companies on this year’s list are operating in Chapter 11 bankruptcy, including aluminum maker Aleris (taken private by Texas Pacific Group) and Reader’s Digest (by Ripplewood Holdings).
Private equity firms, which own one-third of the companies on our list, are scrambling to repair such souring investments. The State Street private equity index, which tracks investments made by 1,600 investment firms, was down 28% in the year ending March 2009. As punishment, private equity funds have seen the average amounts they raise from investors cut in half.
Yet the S&P, up 21% this year, has everyone thinking it's party time again. Kohlberg Kravis Roberts has its sights set on a stock offering for Dollar General (No. 29). Billionaire David Murdock is planning to spin off Dole Foods (a subsidiary of No. 37, Murdock Holding). The fractured Pritzker family wants to cut in the public on its Hyatt Hotels chain (No. 104).
Not so fast. The number of U.S. public offerings has fallen from 42 in the first nine months of 2008 to 30 through the same time period this year. Only two firms from last year’s list, Select Medical ( SEM - news - people ) and Education Management ( EDMC - news - people ), have gone public this year.
Recent receptions to new issues have been mixed. Education Management, backed by Providence Equity, Goldman Sachs ( GS - news - people ) and Leeds Equity, is up 21% since its first closing price in early October, but Select Medical, backed by Goldman, Morgan Stanley ( MS - news - people ) and Bank of America ( BAC - news - people ), is down 4% since its late-September offering.
One wonders if bubble-borne balance sheets will scare off investors. Dollar General’s debt of $4.1 billion is equivalent to 54% of its capital. West Corp., a telecommunication services firm, has debt of 138% of capital (a ratio due to negative equity).
Our list of largest private companies includes only firms with revenue greater than $2 billion. There are only two new names on the list: Interstate Bakeries (No. 166), the maker of Twinkies and Wonder Bread, which was taken private in February by Ripplewood Holdings and General Electric ( GE - news - people ), and Pilot Travel Centers (No. 14), here by dint of a change in ownership structure.
Most of the companies on our list have no plans to change their private statuses. Many businesses like the freedom from quarterly earning expectations and reduced obligations to Sarbanes-Oxley reporting requirements. (Private companies with publicly traded debt must file financial statements with the Securities and Exchange Commission.)
In addition to our $2 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 have shares with ownership restricted to some group, such as employees or family members. We exclude foreign companies, companies that don’t pay income tax (like Mohegan Tribal Gaming Authority), mutually owned companies (like State Farm Insurance), cooperatives (like Central Grocers), companies with fewer than 100 employees, and companies that are more than 50% owned by another public, private or foreign company. We also leave out companies with their primary business in auto dealerships or real estate investment and/or management.
Whenever possible, our revenue figures for each company exclude sales of publicly traded subsidiaries. For example, our $106.3 billion revenue estimate for Cargill excludes $10.3 billion in revenue for its publicly traded subsidiary The Mosaic Co. ( MOS - news - people ).
Our data sources include voluntary disclosures by companies, Securities and Exchange Commission filings and estimates from Forbes researchers and outside sources.
You can browse through our list of America’s Largest Private Companies by rank, name, state, industry, revenue and number of employees.