Hims & Hers (HIMS) acquires Eucalyptus for global expansion

Hims & Hers, Inc. (HIMS) announced on Thursday that it has acquired Eucalyptus, an Australian consumer digital healthcare company, for $1.15 billion.

Hims said that approximately $240 million of the transaction will be paid through cash, with the remaining to be paid in guaranteed deferred payments and earnout payments tied to financial targets through early 2029.

The company will have the option to make the deferred payments either through cash or stock. Hims said that it is prepared to finance most of the transaction with cash that it currently has on hand as well as cash flows from its US operations.

The deal is expected to close in the middle of this year.

Hims' stock closed slightly down on Thursday and its shares have plunged over 51% so far this year.

Eucalyptus operates in Australia, the UK and Germany, with expanding operations in Japan and Canada. Hims said that the acquisition will allow it to deepen its presence in the UK, Germany and Canada, while expanding for the first time into the Australian and Japanese markets.

Following this acquisition, Hims said that it "plans to expand its bench of local expertise and scale its infrastructure, making it possible for the company to reach millions more people globally."

Eucalyptus operates several consumer brands across the world, including Juniper and Pilot, and has served more than 775,000 customers, according to a press release announcing the deal. It currently has an annual revenue run-rate of $450 million.

In a statement, Hims founder and CEO Andrew Dudum said that delivering healthcare "looks different for every region and every person" and that the company has "shown the difference that makes in the US, and the logical next step is working with more international experts to make that difference abroad.”

“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," " Dudum added.

"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.”

Hims looks to grow its European market share

Hims first entered the European market through its acquisition of ZAVA this past June, giving it access to the UK, Germany, France and Ireland.

Following the completion of its latest transaction, Eucalyptus CEO Tim Doyle will become SVP of International for Hims & Hers.

“By joining Hims & Hers, we will help more people globally believe in the future of healthcare: simple, high-quality, personal, and designed to help prevent disease, instead of merely treating it,” Doyle said in a statement.

“We’ve spent seven years helping customers around the world find the care that fits them, and we believe today’s news will be part of accelerating the movement towards affordable healthcare for everyone that feels like a luxury.”

The further expansion into Europe comes at an interesting moment for Hims, having been sued last week by Danish healthcare company Novo Nordisk (NVO) for patent infringement after Hims released a copycat version of its popular Wegovy weight-loss pill.

Hims pulled its compounded semaglutide pill from the market a couple of days before the lawsuit was filed.

Meanwhile, the US Food and Drug Administration (FDA) also released a statement last week announcing "its intent to take decisive steps to restrict GLP-1 active pharmaceutical ingredients (APIs) intended for use in non-FDA-approved compounded drugs that are being mass-marketed by companies — including Hims & Hers and other compounding pharmacies — as similar alternatives to FDA-approved drugs.”

Hims released a statement on X responding to Novo's initial legal threats, saying that its "track record speaks for itself" and that it is "focused on bringing more access, more positive outcomes, and more choice to customers everywhere."

"This is not the first time (nor will it be the last time) a big pharma company has suggested taking an accessible, customer-first approach to healthcare is dangerous, illegal, or bad for the marketplace," the company said. "This narrative is as predictable as it is outdated and false."