Bregal Sagemount Clinches Fifth Deal in 16 Months, Mulls Debt Fund

Bregal Sagemount, the growth equity firm founded by former Goldman Sachs and Great Hill Partner executives, has clinched five deals since its launch in May 2012.

On Wednesday, New York-based Bregal Sagemount led a $21.5 million growth equity financing round for ZeOmega, a provider of software for population healthcare management (PHM). Existing investors BlueCross BlueShield Venture Partners and Sandbox Industries also participated.

Bregal Sagemount will have a “significant” minority stake in ZeOmega, says Philip Yates, a co-founder and partner. ZeOmega will continue to be controlled by its two co-founders, Sathya “Sam” Rangaswamy and Nandini Rangaswamy, Yates says. The husband-and-wife team sold a modest stake, under $5 million, Yates says.

ZeOmega has been growing robustly, Yates says. The company’s health management software helps improve healthcare outcomes for payers and providers by analyzing the highest-risk patients, coordinating detailed care plans for individuals and delivering analytics for proper reimbursement, Yates says. “PHM is becoming increasingly important as payers focus on managing their members, and providers are being asked to shoulder more risk for delivering health outcomes,” Yates says.

The ZeOmega investment is Bregal’s fifth since it raised its 500 million debut fund. Its other investments are MicroEdge, Vital Insights, Recondo Technology and Andreima. Another three transactions are under exclusive “letter of intent,” which will bring Bregal’s total to eight, Yates says. “If we get the other three [deals], half of the fund will be invested,” he adds.

Bregal Sagemount will start thinking about raising a new pool once its first one is 75% to 80% committed, he says. “Down the road we may be looking to raise adjacent strategies, which may include a debt fund,” Yates says.

Outside of Yates, Bregal Sagemount’s other co-founders include Gene Yoon, the former head of PE for Goldman Sachs America’s special situations group; Daniel Kim, an ex-VP of Goldman Sachs America’s special situations group; Michael Kosty, a former investment professional with Goldman’s special situations group; and Adam Fuller, a former member of the growth equity team at Goldman’s merchant banking division. Yates, for his part, hails from Great Hill Partners where he spent 10 years as a senior investment professional.

Bregal Sagemount refers to the firm’s sole LP: Bregal Investments, the corporate investment arm of the Brenninkmeimer family. “Sagemount” was added after Yates and his co-founders combined two submissions from a crowdsourced naming campaign. “Sagemount is us,” Yates says, referring to the firm’s executives.

Bregal Sagemount will take minority or majority positions. The firm typically provides from $15 million to $75 million equity per deal, but can invest up to $150 million, Yates says. Sectors of interest include software and technology services, business services, healthcare, financials and consumer services.

Ryan Stewart and Jason Grais of TripleTree provided financial advice to ZeOmega.

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