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Tuesday, May 24, 2022

Couple Finds IT Business Booming in Mission Viejo

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Paul Behrman spent the first decade of his career working for private equity, often moving around the country.

He and his wife, Nadia Behrman, wanted to settle down in one area so they could plant roots for their son, Platon Pukhov.

A vacation in Laguna Beach helped him make up his mind as his then 13-year-old son played basketball on its iconic courts overlooking the Pacific Ocean.

“My son said this was the best place in the whole world,” Behrman recalled.

A few months later, Behrman acquired the Mission Viejo franchise of Team Logic IT, a computer services business owned by Franchise Services Inc., a management company that also owns the brands Sir Speedy, PIP Printing and Signal Graphics.

TeamLogic IT, which has total 243 offices nationwide and also has its headquarters in Mission Viejo, said its 2021 revenue climbed 30% in 2021 because “an acceleration of cyberattacks” has fueled growth in managed IT services for small and midsize companies.

On a companywide basis, TeamLogic IT ranked No. 10 on the Business Journal’s annual list of fastest-growing private companies with two-year growth of 51% to $108.1 million for the period ended June 30.

Behrman liked the Mission Viejo franchise because of its solid base of customers with 20 to 400 employees, including Yogurtland Franchising Inc. His franchise’s annual revenue is around $6 million.

“The franchise grows every year, has recurring revenue and it’s very stable,” he said. “I really like the franchisor.”

One-Light Town

Behrman, who grew up on a ranch in a one-stoplight town in Oklahoma and attended the University of Texas where he played defensive back on its football team, has spent dozens of years in technology. Besides earning an MBA from Stanford, he spent half his career in private equity, buying internet service companies such as The Golf Warehouse, now the leading e-commerce company in that industry.

He partnered with IMG for IMG/Chase Sports Capital, a New York City-based growth equity firm focused on sports and media with about $200 million in capital. He was a partner in Celerity Partners, a Los Angeles-based equity firm where he acquired companies like FlexManage, managed IT services provider for law firms, and the New Release, a grocery store movie vendor that was acquired by Red Box.

He then started running companies after he became fascinated that the world’s leading AI experts couldn’t engineer a computer to play poker at a professional level. He quit his high-paying job and raised nearly $1.3 million to build Advanced AI Systems Inc., at the time the only legal real money online poker site in the U.S.

“I became obsessed with poker and artificial intelligence,” he said. “I quit a high-paying private equity job. While it didn’t succeed, I had a ton of fun.”

He then worked as a chief operating officer at Boulder, Colo.-based Sounds True, an online multimedia company whose offerings serve the mindfulness and psychotherapy industries and include online subscriptions, online courses and digital audio products.

$2.8M Price Tag

In January 2020, before the pandemic began, he purchased the Mission Viejo franchise of TeamLogic IT for $2.8 million, a price that included a $2.4 million SBA loan through Umpqua Bank.

“Although Paul did not own any real estate, he did have an MBA from Stanford, had worked at McKinsey & Company, and had strong “C” level experience,” an Umpqua spokeswoman said.

For more on SBA Lenders, see this week’s list that begins on page 26.

His 34 employees include his wife, Nadia, who leads the finance and accounting department.

When Behrman began, he noticed his employees were “stressed” because they worried about the amount of work they had to perform. Behrman decided to hire more employees, even though it might reduce his profit.

“Our service level performance went up—our profit went up as well,” he recalled.

He plans to continue hiring as his 10-year goal of reaching $25 million annually in sales implies he’ll have 150 employees.

“Turns out giving great service is profitable.” 

Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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