Connecture to be taken private by its largest stockholder after years of losses

Connecture Inc., a Brookfield software company, has entered into an agreement to be bought and taken private by its largest stockholder.

Entities affiliated with Francisco Partners, a private equity firm, have agreed to pay 35 cents a share for each share of Connecture common stock not held by Connecture’s existing preferred investors, Francisco Partners and Chrysalis Ventures, and their affiliates.

Connecture stock closed Friday at 34 cents a share, up 18 cents, or 112.8%.

The transaction is expected to close in the first half of this year.

Francisco Partners, based in San Francisco, and Chrysalis Ventures, based in Louisville, Ky., control about 70% of the voting power of Connecture shares.

In 2016, Francisco Partners and other investors invested $52 million in Connecture in exchange for a 34% stake in the company.

Connecture, which develops software to create health insurance marketplaces, employed 339 people as of Sept. 30.

The company lost $26.5 million, or $1.31 a share, on revenue of $82 million in 2016. For the first nine months of 2017, it lost $8.9 million, or 60 cents a share, on revenue of $57.1 million.

Connecture warned that there was “substantial doubt” about its ability to continue as a going concern in its third-quarter results filed with the Securities and Exchange Commission.

The company went public in December 2014 at $8 a share. But the market for online health insurance marketplaces has developed more slowly than expected and the company has reported net losses totaling $96 million since the start of 2012.