Private equity firm TPG has opened a potential sale process for Lyric, the healthcare payment-integrity software business it owns, with preliminary indications that the company could be valued at about $5 billion, people familiar with the discussions said.
Lyric provides software used by insurers to flag and stop inaccurate medical claims payments. Insurers named as Lyric clients include UnitedHealth, CVS and Humana. Sources close to the deliberations said TPG has enlisted investment bankers at JPMorgan Chase to run the possible sale, but they emphasized there is no guarantee the process will result in a completed transaction. The sources spoke on condition of anonymity to describe private discussions.
Those same sources said Lyric produces roughly $250 million of annual earnings before interest, taxes, depreciation and amortization - EBITDA - which, when applied to a 20 times multiple, could imply a near $5 billion valuation. TPG and JPMorgan declined to comment on the matter. Lyric did not immediately reply to a request for comment.
Background on the business and recent growth
TPG purchased the core business, then known as ClaimsXten, for about $2.2 billion in 2022. At the time, the asset had been part of Change Healthcare and was sold as a step intended to alleviate potential antitrust issues connected to Change Healthcare's larger transaction with UnitedHealth. TPG subsequently rebranded the business as Lyric the following year.
Since the acquisition, the investment firm has said Lyric has seen a marked acceleration in revenue growth. While TPG has not disclosed the exact magnitude of that growth, the firm has attributed part of the improvement to deploying artificial intelligence and to the advantages of operating a dataset-rich business - factors TPG said would amplify the benefits from AI.
Market context and buyer caution
The possible sale comes as software dealmaking shows signs of recovery after earlier sectorwide weakness. Investor concern about the disruptive potential of AI had triggered a selloff across software names earlier in the year, and while activity is picking back up, prospective buyers remain cautious about how valuations should reflect technology risk.
Some potential acquirers are evaluating whether AI-native competitors could perform many of the same functions at lower cost, which in turn could undermine the financial assumptions underpinning valuations for specialized software providers, including firms focused on payment integrity and claims management, the sources said.
As an illustration of investor anxiety in the space, the stock of a smaller public peer, Claritev, fell 80% between September 2025 and May of this year amid concerns about AI disruption to software companies. Although that stock has since recovered somewhat, it remains under $38 per share from roughly $72 per share one year earlier, according to the information provided in the discussions.
Process caveats and outlook
Sources cautioned that the sale process is exploratory and may not culminate in a deal. The pace of activity in software M&A is uneven: while interest is returning, uncertainty over competitive dynamics driven by rapid AI development is prompting closer scrutiny of business models and financial projections. That scrutiny is particularly relevant for companies whose products are tightly tied to labor-intensive workflows or where algorithmic substitutes might emerge.
For now, TPG and JPMorgan have declined to discuss the potential sale publicly, and Lyric has not issued a statement. The outcome of the process, should it proceed, will depend on whether buyers are willing to accept valuations that incorporate both Lyric's current earnings profile and the potential upside TPG attributes to AI-enhanced performance.