$5 Billion Price Talk Sets Stage for Insurer-Facing Software Deals
Private equity firm TPG is considering selling Lyric, a healthcare claims software company, for around $5 billion. According to Reuters, TPG is working with JPMorgan to explore options for Lyric, although there's no guarantee a deal will happen.
The price talk comes from profits: Lyric reportedly generates about $250 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) each year. This would put the business at roughly 20 times that figure, which is a rich multiple for 'payer' software, or tools sold to health insurers.
The potential sale could become a benchmark for insurer-facing software in mergers and acquisitions. A marketed ~20 times EBITDA ask for Lyric gives bankers and other sellers a fresh yardstick for US healthcare claims and cost-control software firms.