THE TIMES 100 : THE BEST PERFORMING COMPANIES IN CALIFORNIA : THE FAST TRACK : Buying Bigness : Purchases of Wood, Metal Firms Fuel Maxxam Expansion
It didn’t take long for Charles Hurwitz to figure out what he wanted to do when he grew up.
After graduating from the University of Oklahoma about 25 years ago, Hurwitz, now 48, moved quickly into the world of finance, first as a stockbroker then as a money manager. But that was only the warm-up.
By the early 1970s, Hurwitz was doing exactly what he wanted: buying and selling companies and gradually building a portfolio of operating concerns related enough to be considered a single entity.
Maxxam Inc., now headquartered in the heart of Westwood Village in West Los Angeles, is that entity.
And thanks to the acquisition of KaiserTech, a $2.2-billion aluminum and chemical company, and the merging of its Pacific Lumber timber-producing operations into the consolidated company, Maxxam earned the top spot on The Times list of the 100 fastest-growing public companies in California.
Maxxam’s sales mushroomed from $34.6 million in 1987 to $519.2 million in 1988 almost entirely by virtue of acquisitions.
Maxxam traces its roots to Hurwitz’ 1978 purchase of McCulloch Oil, a Los Angeles oil and gas exploration and production company. Hurwitz gradually dumped McCulloch’s oil operations, and kept its real estate holdings. Last year, Maxxam’s expanded real estate operations, which include resorts in Arizona, Idaho and Puerto Rico, contributed about $60 million of the company’s sales, up from nearly $35 million the year before.
In 1986, Hurwitz began courting Pacific Lumber, a Humboldt County company that is the No. 2 producer of redwood timber in the world.
It was a controversial move from the beginning: Pacific Lumber employees resented the outsider. And environmentalists continue to protest Hurwitz’ efforts to increase the rate of logging of Pacific Lumber’s timberland.
Although the acquisition was completed in 1986, Pacific Lumber’s operations were not fully consolidated into Maxxam’s holding company until last year, when timber operations accounted for nearly $161 million of Maxxam’s sales.
Maxxam capped off 1988 by completing its acquisition of KaiserTech, the Oakland-based aluminum and chemicals concern. For the full year, KaiserTech had sales of $2.2 billion, but for the two months it was in the Maxxam family, it accounted for $298 million of the parent’s total business.
Will Maxxam continue growing? “You bet,” the reclusive Hurwitz responds through a spokesman. There will be internal growth in each of the subsidiaries as well as additional acquisitions. “It’s what we like to call organic as well as opportunistic growth,” the spokesman said.
THE GROWTH 100
Companies ranked by two-year average annual sales growth.
2-year avg. 1988 ’87 annual sales revenue Rank Rank Company growth as % ($ millions) 1 Maxxam Inc. 158.2 519.2 2 L.A. Gear Inc. 148.3 223.7 3 Sun Microsystems Inc. 123.7 1,051.6 4 First Capital Holdings 95.9 735.5 5 CMS Enhancements Inc. 91.9 151.5 6 Silicon Graphics Inc. 91.7 152.6 7 Qume Corp. 91.6 183.0 8 78 Jacobs Engin. Group 91.0 757.4 9 Oracle Systems Corp.* 89.6 471.9 10 AIFS Inc. 70.1 95.6 11 7 Rexon Inc. 69.9 155.5 12 11 3COM Corp.* 67.6 309.9 13 1 Seagate Technology 65.9 1,266.0 14 12 Western Digital Corp. 65.8 768.3 15 Cypress Semiconductor 65.5 139.4 16 Erly Industries* 65.3 336.1 17 Acuson Corp. 62.2 168.5 18 Nichols Institute 61.2 90.7 19 85 Fluorocarbon Co. 59.8 249.8 20 Pacificare Health Sys. 59.4 424.9 21 9 Genentech Inc. 59.2 322.6 22 13 Applied Biosystems Inc. 56.3 134.1 23 Applied Materials 55.9 362.8 24 73 AST Research Inc. 54.8 412.7 25 United Ed. & Software* 54.0 87.8 26 45 Applied Magnetics Corp. 51.2 293.0 27 DEP Corp. 50.8 88.8 28 92 Intel Corp. 50.7 2,874.8 29 Autodesk Inc. 49.6 117.3 30 87 Natl. Sanitary Supply 49.6 179.2 31 38 Integrated Device Tech. 48.0 170.4 32 Lam Research Corp. 47.5 75.0 33 26 Diceon Electronics Inc. 47.4 140.7 34 Microsemi Corp. 47.0 83.7 35 18 Businessland Inc. 46.8 871.6 36 96 Apple Computer Inc. 46.3 4,071.4 37 39 Pacific Scientific Co. 45.0 180.9 38 Calprop Corp. 44.1 75.1 39 41 Adia Services Inc. 43.9 504.4 40 46 Gradco Systems Inc.* 43.7 113.9 41 33 Xicor Inc. 42.7 90.1 42 Landmark Land Co. 42.2 481.8 43 Westcorp 42.1 232.5 44 Seeq Technology 41.7 61.2 45 20 VLSI Technology 40.7 221.2 46 34 LSI Logic Corp. 39.6 378.9 47 Maxtor Corp.* 39.1 339.0 48 FHP International 37.9 503.5 49 MGM/UA Commun. 37.8 674.9 50 54 SPI Pharmaceuticals 37.4 115.9 51 66 Western Micro Tech.* 37.1 98.2 52 14 Wyse Technology* 37.1 488.7 53 Ask Computer Systems 36.9 142.4 54 21 Ropak Corp. 36.6 88.8 55 47 Amdahl Corp. 36.5 1,801.8 56 40 Neutrogena Corp. 36.5 178.9 57 Westwood One 36.2 110.0 58 25 National Education 36.0 457.5 59 Kaufman & Broad Hm.** 35.6 903.4 60 Pyramid Technology 35.3 79.8 61 Price/Stern/Sloan Inc.* 35.0 58.1 62 Brajdas Corp.* 34.6 61.4 63 72 Silicon Systems Inc. 34.5 120.8 64 50 Kaufman & Broad Inc.** 34.2 2,050.3 65 Inmac Corp. 33.8 222.8 66 Brae Corp. 33.7 64.6 67 Advanced Micro Dev. 33.5 1,125.9 68 32 Anthem Electronics Inc. 33.4 264.6 69 Valid Logic Systems Inc. 33.4 108.4 70 Atari Corp. 32.4 452.2 71 36 Williams-Sonoma Inc. 31.7 174.2 72 94 Marshall Industries 31.4 494.5 73 ADAC Laboratories 31.2 80.2 74 Mercury General Corp. 31.2 454.6 75 80 Computer & Commun.* 31.0 112.7 76 59 First Amer. Financial 30.9 631.4 77 53 Tandem Computers Inc. 30.9 1,314.7 78 Precision Aerotech Inc.* 29.8 56.3 79 San Francisco Federal 29.4 397.1 80 Good Guys Inc. 29.2 149.4 81 Earle M. Jorgensen Co. 28.9 474.0 82 6 Micropolis Corp. 28.7 353.1 83 Intl. Lease Finance 28.2 195.5 84 Boole & Babbage Inc. 28.1 56.7 85 Varco International 28.1 68.9 86 30 ICN Pharmaceuticals 27.2 166.3 87 Barry’s Jewelers Inc.* 26.8 156.2 88 Data Design Labs. 26.6 108.0 89 Cimco Inc. 26.1 53.3 90 86 Shaklee Corp. 25.6 627.5 91 65 Bio-Rad Labs 25.4 198.9 92 20th Century Industries 25.2 622.1 93 43 Price Co. 25.0 4,140.5 94 C&R; Clothiers Inc.* 24.9 96.8 95 95 Gottschalks Inc. 24.8 196.0 96 68 Archive Corp. 24.7 122.7 97 58 Dionex Corp. 24.4 69.6 98 Foothill Group Inc. 23.9 92.2 99 P. Leiner Nutritional* 23.4 111.6 100 51 Cherokee Group Inc.* 23.4 158.4
1988 income(loss) Rank ($ millions) 1 3.70 2 22.03 3 66.43 4 52.72 5 2.30 6 12.20 7 5.03 8 6.55 9 67.30 10 .53 11 8.96 12 29.31 13 77.31 14 42.96 15 20.82 16 (2.00) 17 27.49 18 2.81 19 9.85 20 6.34 21 20.56 22 17.02 23 40.02 24 15.07 25 (8.00) 26 23.73 27 4.58 28 452.92 29 32.69 30 3.91 31 18.01 32 2.28 33 9.85 34 2.48 35 18.83 36 400.25 37 (4.66) 38 5.18 39 17.61 40 5.64 41 13.99 42 13.16 43 12.24 44 8.66 45 6.70 46 23.84 47 9.88 48 16.48 49 (48.74) 50 10.24 51 2.86 52 (6.94) 53 10.79 54 2.92 55 213.83 56 23.03 57 1.59 58 46.14 59 48.04 60 8.69 61 1.03 62 2.32 63 12.68 64 24.19 65 9.71 66 1.24 67 19.31 68 11.30 69 6.08 70 39.40 71 5.20 72 21.69 73 11.41 74 28.75 75 (1.02) 76 12.25 77 94.48 78 (3.05) 79 12.75 80 3.30 81 14.83 82 (19.40) 83 43.41 84 6.65 85 2.26 86 4.05 87 5.17 88 6.36 89 3.18 90 27.20 91 9.46 92 58.53 93 94.75 94 (0.18) 95 5.03 96 9.68 97 11.57 98 13.45 99 3.56 100 8.41
*See exceptions, page 38.
**See company notes, page 29.
