TPG Capital closes $2.2B acquisition of claims-editing business ClaimsXten

With UnitedHealth completing its $13 billion acquisition of Change Healthcare, private equity group TPG Capital finalized its $2.2 billion deal for Change Healthcare's claims-editing business, ClaimsXten.

TPG Capital agreed in April to buy the claims-editing software from UnitedHealth Group but the sale of the payment accuracy company was contingent on the closure of Change Healthcare's merger with UnitedHealth Group. The companies began shopping for a buyer for the payment integrity arm in a bid to secure federal backing to consummate the merger.

"We are pleased to complete our acquisition of ClaimsXten and look forward to working with the team to grow the newly established company," a TPG Capital spokesperson said in an email statement.

TPG funded the deal with $1.2 billion of equity and $1 billion in debt financing.

A federal judge on September 19 ruled that UnitedHealth Group's acquisition of Change Healthcare could proceed, dealing a blow to the Biden administration's healthcare antitrust efforts. District of Columbia Judge Carl Nichols issued a sealed opinion blocking the Department of Justice's attempt to intervene in the case, and ordering Change Healthcare to sell off its ClaimsXten business arm as planned.

The UnitedHealth-Change Healthcare deal went through earlier this month.

According to Nichols' opinion, the company plans to name Change Healthcare executive Carolyn Wukitch as CEO of the ClaimsXten business. She has has been leading ClaimsXten since 2000.

ClaimsXten “deploys automated rulesets to improve payment accuracy, reduce appeals and drive administrative savings," according to Change Healthcare in legal filings.

About 375 employees will continue working with ClaimsXten as part of the divestiture.

In an unsealed court document filed September 7, TPG revealed that it plans to more than double ClaimsXten’s R&D budget from $14 million in in the 2022 fiscal year to $30 million in 2026.

According to the document, TPG said it could accelerate ClaimsXten's growth by investing more in "innovative seeds that the [ClaimsXten] team had planted, but maybe hadn’t invested as thoroughly behind as they could have."