Consumer health and wellness platform Hims & Hers will ramp up its international presence with the acquisition of Australian digital health company Eucalyptus, it announced Thursday.
The companies have entered into a definitive agreement and expect the deal to close in the middle of this calendar year, pending regulatory approvals and other customary closing conditions.
Hims & Hers said the pickup opens the door to millions of additional customers globally via new expansions into Eucalyptus’ markets—Australia and Japan, which will be new entries for Hims & Hers, and the U.K., Germany and Canada, where it already has footholds.
“With Eucalyptus, we will not only enter new markets, we will expand our ability to serve customers globally, trusting local experts to be a key part of how we transform healthcare into a customer-first, personalized industry,” Andrew Dudum, founder and CEO of Hims & Hers, said in a release. “We believe this puts us on the path to becoming the leading global consumer health platform, where everyone can access the best care for their needs, regardless of where they live.”
The purchase is valued at up to $1.15 billion, according to the announcement. Hims & Hers will be on the hook for about $240 million in cash upon the deal’s close, with the remaining balance comprising guaranteed deferred payments over 18 months post-close plus additional earnout payments tied to set financial targets through early 2029.
Hims & Hers said it’s currently planning to finance “most of the transaction” with its existing cash on hand plus cash flows from its U.S. business. The company may choose to settle most of the deferred and earnout payments as either cash or stock. That deal structure will allow Hims & Hers “to preserve the financial flexibility of the company, ensuring continued control over balance sheet management and capital allocation,” it said in a release.
Eucalyptus was founded in 2019 and describes itself as Australia’s largest digital health provider. Across its full footprint, the company has coordinated nearly 2 million consultations and has more than 775,000 customers who have purchased a program through one of its brands, such as Juniper (women’s weight loss) or Pilot (men’s health and wellness). It currently has an annual revenue run-rate of more than $450 million, though it is not profitable.
The company’s brands will be transitioned into Hims & Hers over time, per the announcement. Eucalyptus CEO Tim Doyle will also be named senior vice president of international at Hims & Hers once the ink has dried.
The companies, in their announcement, said the deal—"together with Hims & Hers’ other recent acquisitions” such as European digital healthcare provider Zava or the Canadian platform Livewell—will give Hims & Hers the local expertise and infrastructure needed to continue scaling its business across the globe.
The expanded footprint also bolsters Hims and Hers’ appeal to the companies whose products it sells, the companies noted.
“As more biotech innovators, diagnostic companies and leading drugmakers look for partners to support scaled distribution of innovative new treatments, this deal is expected to strengthen the company’s commercial relationships and create new opportunities for future collaborations,” they wrote in the deal announcement.
Hims & Hers has been working to expand its geographies as well as its platform offerings. Late last year saw the kickoff of blood-sample collection diagnostics, though a more recent plan to launch a compounded, semaglutide-containing pill for obesity ran into controversy and was quickly pulled. The latter accelerated the company’s plummeting stock price, which was around $60 per share in October and now hovers around $16.
Christina Fa, principal at growth-stage venture capital firm NewView, which has invested in both companies, said the marriage of Hims & Hers and Eucalyptus is “poised to create a global direct-to-consumer health platform with unprecedented reach. The GLP-1 market is projected to grow from $15 billion in 2024 to $150 billion by 2035, with international penetration today still below 3%. We believe this represents a generational shift in how the world treats chronic disease, and the combined platform of Eucalyptus and Hims & Hers is positioned at the center of it.”
Hims & Hers will likely elaborate on the Eucalyptus deal and its other recent efforts during its fourth-quarter earnings call, which is scheduled for Feb. 23.