Software developer Connecture acquires Los Angeles firm DRX [Milwaukee Journal Sentinel]
(Milwaukee Journal Sentinel (WI) Via Acquire Media NewsEdge) Jan. 23--Connecture Inc., a fast-growing software company in Brookfield, said it has bought DRX, a company that sells software that enables consumers to compare and enroll in Medicare health and prescription drug plans.
Connecture sells similar software for commercial health plans for people under 65 and the two companies have many of the same customers.
"They are complementary players," said Dan Maynard, president and co-founder of Connecture.
The purchase price was not disclosed but Maynard said Connecture paid cash for the company.
DRX's customers include many of the country's largest health insurers and pharmacy benefit managers. Its software also is used in the PlanFinder and Online Enrollment Center at the Medicare.gov website, where consumers can compare and enroll in Medicare Advantage and Part D plans.
The company, based in Los Angeles, employs about 75 people.
Connecture had revenue of about $50 million last year, up from about $30 million n 2011. Before buying DRX, it employed about 174 people in Brookfield and 289 companywide.
The company added about 100 people, including 67 in Brookfield, last year, and said it has openings for 62 full-time jobs in Wisconsin.
The acquisition comes less than six months after Great Point Partners LLC, a private investment firm based in Greenwich, Conn., invested $18 million in Connecture. Chrysalis Ventures, a venture capital firm, based in Louisville, Ky., and a previous investor, invested an additional $2 million at the time.
Great Point Partners introduced Connecture and DRX, Maynard said.
DRX's products include software that enables consumers to compare brand name pharmaceuticals with other drugs in the same therapeutic class, such as generics. That information can help consumers find the least expensive prescription drug plan.
Three out of every four people who enroll in a Medicare Part D plan use DRX's PlanCompare product, Connecture said.
"Both companies share a commitment to make it less expensive to compare plans and enroll in the right one," Doug Schneider, chief executive of Connecture, said in a statement.
More than 25 million Americans have shopped for health insurance online using systems built by Connecture, the company said.
Its customers include more than half of the 20 largest health plans in the country. In Wisconsin, they have included Dean Health Plan, Security Health Plan, WPS Health Plan and Network Health Plan.
Connecture also is supplying the software for the core shopping and enrollment functions for the state exchanges being built in Maryland and Minnesota under the Affordable Care Act.
The company is close to announcing it will be a subcontractor for the exchange in a third state, Maynard said. It also has begun winning work for so-called private exchanges, where employees are given a fix amount of money from their employer and then can pick the health plan of their choice.
All this, he said, will keep the company busy.
"The next year is about taking advantage of the combined company we just created."
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