TPG mulls $5bn exit of healthcare payments software firm Lyric
TPG is weighing a potential sale of Lyric, the healthcare software business formerly known as ClaimsXten, in a transaction that could value the company at around $5bn, according to a report by Reuters citing unnamedpeople familiar with the matter.
TPG, the private equity firm, is contemplating a potential $5 billion sale of healthcare payments software firm Lyric, according to a report by Reuters citing unnamed sources. Lyric, formerly known as ClaimsXten, provides technology to healthcare insurers for identifying and preventing inaccurate medical claims payments. Its customers include UnitedHealth, CVS, and Humana.
The transaction would be facilitated by JPMorgan, although discussions remain preliminary. Lyric generates approximately $250 million in annual EBITDA, leading to a valuation of around $5 billion at a 20 times EBITDA multiple. TPG acquired ClaimsXten, the precursor to Lyric, from Change Healthcare for about $2.2 billion in 2022.
The sale was part of the process surrounding UnitedHealth’s $13 billion acquisition of Change Healthcare, aimed at addressing potential antitrust concerns. The divestiture was completed in 2023, and Lyric had been rebranded by TPG that year. Since the acquisition, TPG has reported accelerated revenue growth for Lyric, though the extent of growth remains undisclosed.
The firm has also emphasized Lyric's use of artificial intelligence and extensive data resources, highlighting potential future opportunities. However, AI's rapid development poses a new challenge for potential buyers of specialist software businesses, as they assess whether AI-native platforms could eventually replicate some functions at a lower cost, potentially impacting valuation assumptions in sectors like claims management and payment integrity. TPG, JPMorgan, and Lyric have not yet commented on the potential sale.
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