L.A.'s Biggest Private Firms a Dowdy Group.

Ever hear of Consolidated Electrical Distributors Inc.?

In an age of sexy dot-coms, Web portals and incubators, Consolidated's line of business is positively dowdy: distributing electrical parts.

Make that big and dowdy: With annual revenues near $2 billion, the Westlake Village-based firm is L.A. County's largest private company, according to a Business Journal survey, and a striking example of a successful business that attracts little attention and prefers it that way.

Consolidated is the third-largest distributor of electrical parts in the country, with more than 400 distribution centers nationwide. A 30-year-old company, it has rarely appeared in the news, except in trade journals. Company officials did not return calls from the Business Journal.

Like many of its peers, Consolidated is family-owned and more concerned with its reputation within its field than in the world at large. It enjoys the luxury of not answering to the public or the press.

Consolidated is hardly alone. Thousands of privately held companies in Southern California form the base of the region's diversified economy, but are in more traditional - and considerably less sexy - industries than the dot-com companies getting all the attention. They generally don't get a lot of public recognition, which suits many of them just fine.

Consolidated jumps up to No. 1 on the list from No. 2 last year, replacing Unified Western Grocers (which before a merger this year was called Certified Grocers of California). Unified Western Grocers, now No. 2, is a large grocery distributor that supplies independent food retailers. Both No. 3 on the list, general contractor J.F. Shea Co., and No. 5, Franklin Mint holding company Roll International, are family-owned. No. 4, California Dairies Inc., is a milk cooperative. All five are at least 25 years old.

"These are stealth companies," said Alan Carsrud, director of the Family & Closely Held Business Program at UCLA. "They are in every one of the major industries. Many are second-generation-operated. They form the base of the industrial might of any country and of this region as well. And it is such a diversified base. We have high-tech, we have low-tech and we have no-tech."

Lacking a public profile is only one of the common elements among many of L.A.'s 100 largest private companies.

Almost 75 percent are more than 25 years old. At least 40 percent are controlled by one family directly or through trust. One-fourth are in the manufacturing sector in some way. Almost 20 percent are in construction or real estate development.

Looking over the field, only a relative few are in what could be considered cutting-edge industries. Less than 10 percent are high-tech or software companies. Investment-related companies are scarce. And the entertainment field isn't well represented at all.

Many of the businesses started either during or after the boom years following World War II -- some becoming suppliers to the then-fast-growing aerospace industry. But they learned to adapt to the changing landscape of Southern California, especially after the aerospace industry was devastated by defense cuts and consolidation.

"There's nothing flashy about companies like these, but to weather the various recessions we've had in the past 15 years takes some doing," said Mark Drayse, research director at the Economic Roundtable, a Los Angeles think tank. "The L.A. economy has undergone an enormous amount of restructuring, but these are the companies that are still here."

Because so many of them were built on relationships with other businesses rather than with consumers, there is little perceived need to advertise. More important is cultivating inter-industry ties, marketing to other businesses.

Being private brings with it certain advantages. It means not having to worry about quarter-by-quarter earnings or market gyrations. Because expansion comes at a more measured pace, relying on capital markets for funding is often unnecessary.

Consolidated Electrical grew to its current size by buying local distributors of electrical equipment nationwide, usually keeping the management it inherits and promoting from within.

The company has a reputation for allowing a good deal of autonomy among its regional offices, to the point that for years it had no central computer system, something that apparently is changing.

Last September, Consolidated acquired Michigan-based All-Phase Electric Supply Co., the nation's eight-largest electrical supplier with sales of $570 million, for an undisclosed sum. Industry observers say it was probably Consolidated's largest purchase to date. In January, the company launched a takeover bid for Australian firm Metal Manufacturers Ltd. that fell short, but left Consolidated holding more than 30 percent of that company's shares.

"It is viewed as a pretty sharp operator, but they do play it pretty close to the vest," said William Jeflin, an analyst at Stifel Nicolaus in St. Louis who covers public companies such as Hughes Supply and Wesco Distribution Inc. that compete with Consolidated.

Jim Lucy, chief editor of Electrical Wholesaling, a trade magazine based in Kansas, says Consolidated was started by the Colburn family, and is run by Keith W. Colburn, apparently from the second generation of the family.

Lucy recalled his only meeting with Colburn at an industry gathering in 1986 after a road race that was organized as part of the festivities.

"(He) won the race, and talked about running for the Yale track team and how he had even wanted to try and compete for the Olympics," Lucy said. "But his dad said that if he wanted to be part of the family business, he better get serious about things. He was very nice, but when talk turned to the company it was, `Nice to meet you,' and off he went."

That is a telling point about family-owned private companies: Internal affairs are internal.

"These companies aren't arguing over, `God, who is going to be president next year,' and you don't find as much movement of management," UCLA's Carsrud said. "They aren't concerned about what the public thinks."

Because the companies Consolidated has acquired over the years presumably generate enough revenue to finance ongoing deals, there is little reason to suppose it would need, or want, to go public. Wesco, a close competitor, went public in May at $18 a share, but after quickly jumping above $20 has plunged, and is now trading at around $6.50 a share.

"Given the market conditions out there, I can't imagine why (Consolidated) would go public," Jeflin said. "They're doing fine as it is."

Researcher Karen Teitelman contributed to this story.

                          This Year vs. Last Year
           The five biggest private companies in L.A. County in
                              1999 and 1998.
          1999                                   1998
1. Consolidated Electrical Distrib. 1. Certified Grocers of California
2. Unified Western Grocers [*]      2. Consolidated Electrical Distrib.
3. J.F. Shea Co.                    3. Roll International
4. California Dairies Inc.          4. Parsons Corp.
5. Roll International               5. Sunkist Growers Inc.
(*)Certified Grocers of California has changed its name to Unified Western
Grocers.
Source: Business Journal Research