Connecture Inc., a Brookfield-based provider of web-based information systems used to create health insurance marketplaces, announced Thursday it has entered into an agreement to be acquired by San Francisco-based global private equity firm Francisco Partners.
Upon completion of the transaction, Connecture will become a privately-held company owned by Francisco Partners, Chrysalis Ventures and their affiliates, which have all agreed to roll their existing equity into the acquiring company.
Under the terms of the agreement, entities affiliated with Francisco Partners have agreed to pay 35 cents per share for each share of Connecture common stock not held by the company’s existing preferred investors, Francisco Partners and Chrysalis Ventures, and their affiliates. Francisco Partners and Chrysalis Ventures together own about 70 percent of the combined voting power of Connecture’s outstanding voting shares.
The transaction is expected to close in the first half of 2018.
“This transaction comes after a transformational year for our company and we look forward to the next phase,” said Jeff Surges, president and CEO of Connecture.
Connecture narrowed its losses over the first three quarters of 2017, but pulled in less revenue than in the same period in 2016. The company’s net loss decreased from $20.4 million in the first nine months of 2016 to $8.9 million in the same period in 2017. Revenue for the first three quarters of 2017 dropped 6.4 percent from the same period in 2016.
Surges at that time said those results showed significant year-over-year progress given the current headwinds from “an uncertain macro environment in the commercial health insurance marketplace,” including the uncertain future of the Affordable Care Act.
Representatives of Connecture declined to provide additional information on the transaction.
