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Mitchell International’s CFO Eases Into Chief Executive’s Chair

The changing at the top for some companies can be tricky, but for Mitchell International, the longtime San Diego software firm, the transition that began two years ago takes hold.

On Jan. 1, Alex Sun, Mitchell’s former president, officially assumed the title of chief executive of the company, which makes software products for the auto insurance industry and auto repair shops.

Former CEO Jim Lindner said the move had been planned for a few years, as it became clear Sun had all the tools, and then some, to lead the company, founded in 1946.

Sun, 41, had been doing a great job as chief financial officer, but showed flashes of the business acumen that made Lindner think he could be the right person to take over.

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“I told him I was looking for a successor, and told him he could be it,” Lindner said.

Sun’s initial response was to turn the job down, saying that he liked being a CFO and wanted to stay a CFO.

After some coaxing, Sun came around and last year, the firm’s board approved Lindner’s shift to executive chairman. In this capacity, he continues advising his prot & #233;g & #233;, but relinquishes running the business.

Sun said even when Lindner told him he had the skills to be CEO, and was named president, he still wasn’t sure he would get the chief executive’s chair.

The two years he worked as president allowed Lindner and the board to conclude Sun had the right stuff, but also gave Sun the chance to try on the job’s responsibilities and see how they fit.

“Even when I took the president’s position, I did not have aspirations to be the CEO of the company,” Sun said. “I’m just fortunate that it was the right bet that Jim took on me. It turned out quite nice. The second part of this is that I liked (the job).”

Sun said the biggest change he’s had to make from his former job involves spending time with customers, which entails far more travel time.

“Three years ago as a CFO, I’d travel maybe 50,000 miles a year. Now I’d say I average 250,000 miles a year,” Sun said.

Before Mitchell International was acquired by Aurora Capital Group for about $500 million last year, the buyers did extensive due diligence about every aspect of the company, including its management team, said Aurora Chairman Gerald Parsky.

He said Mitchell’s transition plan made a lot of sense, and Sun’s performance over the past nine months proved Lindner made the right choice.

“He (Sun) understands not only the financial sides of the company but understands all its aspects, and is well prepared to assume the role of CEO,” Parsky said.

Mitchell’s business has been growing about 10 percent annually in recent years. In 2007, revenues were about $200 million.

The software the company makes helps insurance companies, auto body repair shops and parts suppliers provide their services more efficiently.

The company was started by Glenn Mitchell, an auto parts manager at a local car dealer, who made lists of car parts and prices. The company’s original business compiled the data on cars parts for repair shops and auto insurers in massive printed manuals. Over the years, the data was eventually offered on CDs and more recently, via the World Wide Web.

Linder said about 10 years ago, about 40 percent of the company’s data was offered in print form. Today, only 7 percent is printed.

The fastest growing part of Mitchell’s business is in medical and casualty insurance billing software, which gives insurers a clear picture of the medical services provided. Over the last six years, the revenue from this slice of the business increased from 10 percent to about one-third of the total, Sun said.

Mitchell provides services to 270 insurance companies, including the nation’s largest carriers. It also has more than 22,000 collision repair shops as customers.

The firm’s growth is generally higher paying technical jobs. It now has 1,000 employees, including 700 working at its Scripps Ranch headquarters.

Among the biggest challenges the company has faced in recent years is finding skilled people to fill its ranks, Sun said. It has at least 50 job openings, with the greatest need on the technical side, mainly software engineers, quality assurance professionals and product managers. There are also openings in sales, customer service and finance.

Other Mitchell outposts are in San Francisco; Albuquerque, N.M.; Evansville, Ind.; and Toronto.

Mitchell is one of three large software firms competing in the auto claims insurance industry. San Diego is the headquarters of one of the largest, Solera Holdings Inc., a public company that had prior fiscal year revenue of about $470 million, and about 2,100 employees in 49 countries. Solera is the result of a $975 million acquisition of a unit of Automated Data Processing by GTCR Golder Rauner LLC, a large private equity firm based in Chicago.

The other company is CCC Information Systems of Chicago.

Donald Light, an analyst that covers the industry for Celent, a Boston-based research firm, said Mitchell has showed steady growth in recent years, and has a reasonable chance of gaining market share.

Sun exudes an aura of a man who loves what he does, and enjoys learning and getting others to work harder at achieving the company’s goals.

He grew up in Queens, N.Y., the son of Chinese immigrants who ran a variety of different businesses, including an auto collision repair shop and a small insurance company, as well as a group of restaurants. His brother is also a CEO for a New York-based online media company.

Sun said he spends an average of 60 hours a week at his job, although much of that time involves communicating via e-mail, through his BlackBerry.

“Most people would complain that I send an incredible amount of e-mails. I’m a BlackBerry addict.”

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