Big Gains on Private Equity Acquisition: 1/5 Top Performer
2018’s bullish momentum continued in today’s trading session, with the Dow Jones leading a pack of major indexes posting solid gains on the day. Solid private-sector payroll data from the US provided fuel for the rally. Gains were broad-based, with eight of the ten leading sectors posting gains during today’s trading.
Today’s Top Performer posted astonishing gains on acquisition news, breaking the streak of Chinese and Blockchain stocks dominating our Top Performer blog in recent weeks.
Connecture produces web-based information systems that are used by health industry clients in developing insurance marketplaces. Yesterday evening after trading closed, they announced plans to be acquired by a private equity firm, Francisco Partners.
Per the terms of the agreement, Francisco Partners (which already has a stake in CNXR) will purchase remaining outstanding common shares of Connecture at a price of $.35/share. The terms of the deal also allow for a 45-day “go shop” period—giving CNXR an opportunity to find another buyer willing to beat this price.
CNXR’s stock doubled and then some, posting 110% gains at the time of this writing. These gains represent a solid final act of recovery for CNXR, which has languished for years after achieving all-time highs near $13 in spring of 2015.
Often, investors tend to imagine profitable acquisition trades in terms of high profile, synergy driving events where a high profile megacorp buys a hot startup. But these sorts of events—a private equity firm finding some hidden value in a long-struggling health tech stock—can be just as profitable, if you have the tools to strike in time.
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