The sale of Brookfield-based Connecture Inc. to San Francisco-based private equity firm Francisco Partners is now complete. The transaction cost totaled $52.1 million.
Connecture develops web-based information systems used to create health insurance marketplaces. With the sale of the company, it will now go private.
Francisco Partners previously held a 58 percent stake in Connecture. The $52.1 million sale transaction was funded by about $8.9 million in equity financing from Francisco affiliates and term loans.
With the completion of the sale, Leonid Rozkin became a director at Connecture. David Jones Jr., Kraig McEwen, Ezra Perlman and Jeff Surges will continue to serve as directors. And A. John Ansay, Vickie Capps, Paul Kusserow and Russell Thomas are no longer directors. Connecture’s officers will remain in their roles.
“This is a transformative new chapter for our organization,” said Surges, president and chief executive officer of Connecture. “Ultimately, it will allow us to have greater mobility to execute on our vision of becoming the clear choice for shopping, quoting and enrollment technology for the U.S. health insurance market. The flexibility provided as a private company, coupled with Francisco Partners’ substantive experience growing technology organizations, positions us to continue to build on our market leadership, nurture our client relationships and capture new business opportunities that drive us toward an even brighter future.”
“We’re thrilled about the completion of this transaction as Connecture perfectly complements our portfolio of smart and innovative technology companies,” said Perlman, co-president of Francisco Partners. “We look forward to being part of Connecture’s growth and supporting their near and long-range vision.”
Connecture has struggled as the health insurance marketplace and the Affordable Care Act faced uncertainty. The company reported a 2017 net loss of $15.5 million, or 96 cents per share. In 2016, it reported a net loss of $26.6 million, or $1.31 per share.
