Connecture Prices Well Below Projection in Nasdaq Debut

When healthcare software company Connecture filed plans with the SEC in October to go public, it was a significant announcement in Wisconsin. Relatively few tech companies here go that route, opting instead for mergers and acquisitions.

The Brookfield, WI-based company followed through with those plans today, pricing 6.6 million shares at $8 apiece, which would raise just north of $53 million before paying underwriters. The stock was trading around $8.75 late this morning.

The price was well short of Connecture’s (NASDAQ: CNXR) projected range of $12 to $14 per share, and the company ended up offering nearly 900,000 more shares than it initially intended. Connecture would have raised between $69.2 million and $81.8 million under its earlier IPO proposal.

It’s not clear why Connecture priced lower, but its Nasdaq debut comes at a time when tech IPOs have slowed down in general.

Connecture provides Web-based software that helps consumers shop for health insurance plans. The company was founded in 1999 as SimplyHealth and was based in Atlanta for most of its existence. It has gone through several evolutions, merging with Riverwood Solutions in 2004 and acquiring Insurix in 2011 and DRX last year. In 2012, Connecture relocated to Wisconsin, thanks in part to state tax incentives, according to the Milwaukee Business Journal.

The company was co-founded by Dan Maynard, who now leads West Bend, WI-based GrandCare Systems. Connecture’s CEO is former Thomson Reuters exec Doug Schneider.

Connecture previously raised more than $41 million from investors. Prior to the IPO, Greenwich, CT-based private equity firm Great Point Partners owned 39.2 percent of the company; Louisville, KY-based Chrysalis Ventures held 28.5 percent; Memphis, TN-based private equity firm SSM Partners owned 20.2 percent; and Austin, TX-based LiveOak Venture Partners owned 10.6 percent, according to SEC documents.

Connecture’s underwriters are Morgan Stanley, JPMorgan, Wells Fargo Securities, Raymond James, and William Blair.

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