Warrior Trading Blog

Top 5 Largest Private Companies

largest private companies

The growth of business and trade caused many problems that traditional forms of business did not solve. For instance, the unlimited liability feature of a sole proprietorship form of business led to people creating partnerships. However, this proved to be too risky and inadequate and saw the rise of private companies as a concept.

What is a Private Company?

A private company refers to a company held under private ownership. Private companies may have shareholders and issue stock, but their shares are not issued through an initial public offering (IPO) and do not trade on public exchanges. Besides, shares of these enterprises are less liquid, and their valuations are complex to determine.

The following conceptual framework gives a view of private companies.

Difference between private and public companies

The difference between private and public companies can be drawn clearly on the following grounds;

  1. Definition

A private company can sell its own privately held shares to several willing investors while a public company can sell its shares to the general public.

  1. Source of Funds

For privately traded companies, the source of funds is venture capitalists of a few private investors. For publicly traded companies, the source of funds is selling its bonds and shares.

  1. Traded on

The stocks of private companies are traded and owned by only a few private investors, while those of public companies are traded on stock exchanges.

  1. Size

Privately traded companies can also be large enterprises. The notion that they are smaller is utterly false. On the contrary, publicly traded companies are big.

  1. Advantage

The major advantage of a privately traded company is that it is at no obligation to answer stockholders, and there is no need for disclosures. The primary advantage of a publicly-traded company is that it can tap into the market by selling more shares.

  1. Regulations

Private companies do not have to follow any regulations issued by the Securities and Exchange Commission (SEC) until they reach $10 million and more than 500 shareholders. On the other hand, public companies have to adhere to a lot of reporting and regulation standards as per the SEC.

A brief overview of the top 5 companies

Cargill

Based in Minneapolis, Cargill was formed in 1865 towards the end of the American Civil War, by William Cargill. His son-in-law John MacMillan and descendants have possessed common equity for over 140 years. Cargill is the largest privately held enterprise in the United States with respect to revenue. The company has expanded from a grain storage facility to a global producer and distributor of agricultural products.

This company serves the following markets:

  • Food and beverage
  • Animal nutrition
  • Bio-Industrial
  • Agricultural
  • Meat and poultry
  • Price risk management
  • Beauty and personal care
  • Pharmaceutical
  • Transportation and logistics

Cargill also has a large financial services arm that manages financial risks in its commodity markets. In 2018, Cargill reported earnings of $3.103 billion and revenues of $114.695 billion.

Koch Industries

Koch Industries is an American multinational with headquarters in Wichita, Kansas. Founded in 1940 by Fred Koch after his innovative crude oil refining process, this company is the second-largest privately held company after Cargill with annual revenues of $110 billion. Its subsidiaries are involved in the production, refining, and distribution of the following:

  • Petroleum
  • Chemicals
  • Energy
  • Fiber
  • Intermediates and polymers
  • Minerals
  • Fertilizers
  • Pulp and paper
  • Chemical technology equipment
  • Ranching
  • Finance
  • Commodities trading and investing

The firm employs 120,000 people and is present in 60 countries, with about half of its enterprises in the United States. It is the largest landowner in the Athabasca Oil Sands. Koch Industries also owns:

  • Guardian Industries
  • Koch Pipeline
  • Flint Hill Resources
  • Molex
  • Matador Cattle Company
  • Georgia-Pacific
  • Invista
  • Koch Minerals
  • Koch Fertilizers

 Albertsons

Established in 1939, Albertsons is a company that operates in the food markets industry. The headquarters of this store chain is in Boise, Idaho. The corporation has divisions as well as subsidiaries that manage stores under different banners, for instance, Jewel, Shaw’s, and Star Market, among others.

The organization is attempting to execute competitive in-store and e-commerce experiences through various initiatives.

It is essential to highlight that the corporation has a strong local and national presence and scale, respectively. Furthermore, it is dedicated to assisting individuals in the United States to lead better lives by making a beneficial impact. In 2017, together with Microsoft, Albertsons Companies Foundation gave almost $300 million in financial and food support. This initiative helped many people in various ways, including:

  • Education
  • Hunger relief
  • Veterans outreach
  • Cancer treatment and research
  • Forums for people with disabilities

Albertsons offers various products:

  • Bakery
  • Beverages
  • Condiments
  • Vegetables
  • Dairy
  • Fruits
  • Canned goods
  • Baby care
  • Pharmacy products

 Deloitte

With its headquarters in New York, Deloitte’s history is dated back to 1845, when the organization was founded. In terms of sales, the corporation boasts of $43.2 B, and in line with that, the revenue increased by 11% last year. The company’s network is quite large with member corporations in over 150 regions and nations.

The firm offers a variety of services, including:

  • Tax
  • Audit and Assurance
  • Consulting
  • Private Corporation Services
  • Mergers and Acquisitions
  • Risk and Financial Advisory
  • Cloud Analytics

There are five core principles that set apart the company’s culture, which is coherent globally. The following values forge the manner in which the employees conduct themselves to create a positive and lasting impact:

  • Lead the way
  • Serve with integrity
  • Caring for one another
  • Foster inclusion
  • Collaborate for attributable influence

PricewaterhouseCoopers

The company, also referred to as PwC, was set up in 1849. The head office is in London, United Kingdom. Additionally, it has offices in 157 nations and has employed over 276,000 people. As of the fiscal year-end, June 30, 2018, PwC’s sales were $41.3 B.

PwC is committed to solving significant problems and encouraging trust in society. Moreover, the firm helps individuals and organizations create the value they seek through delivering quality in services such as:

  • Alliances
  • Advisory
  • Tax
  • Assurance and Audit
  • Family business services
  • Legal

As the world becomes complex by the day, PwC facilitates communities to adjust and evolve. Despite the firm having people from diverse cultures and backgrounds, they have these common values:

  • Act with integrity
  • Make a difference
  • Care
  • Work together
  • Reimagine the possible

Final Thoughts

The top five private companies discussed have made remarkable efforts to not only enlarge their sales and revenues but also create a huge and enduring impact in society. They have also offered numerous job opportunities for people from different walks of life.

With offices in various parts of the world, the firms have promoted pivotal aspects such as diversity and inclusion.

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