Consumer telehealth and wellness brand Hims & Hers wrapped up its merger with special purpose acquisition company (SPAC) Oaktree Acquisition Tuesday, and today began trading on the New York Stock Exchange.
The deal was first announced in October, and was originally expected to close before the end of its Q4 2020. After Tuesday's approval, the deal has provided Hims with $279.5 million, $205 million of which comes as cash from Oaktree Acquisition Corp., and $75 million from the concurrent private placement of common stock priced at $10 per share.
"We drove tremendous progress in 2020 toward our mission of becoming the front door to the healthcare system," Andrew Dudum, CEO and cofounder of Hims & Hers, said in a statement. "Today's milestone brings us even closer to making modern, affordable care accessible to more Americans. By providing a seamless patient experience combined with proprietary technology, we intend to transform many of healthcare’s most important categories, including primary care and mental health.”
WHY IT MATTERS
Hims launched in 2017 with a focus on selling sensitive wellness, grooming and sexual health products to male consumers with the help of online consultations and ordering.
The company has since expanded its business to target new demographics with the launch of its Hers brand, and to offer additional health services including virtual primary care, mental health support and COVID-19 testing. As of a quarterly report provided in late October, the very well funded telehealth company had logged $44.13 million in quarterly revenue (a 91% year-over-year increase).
The new cash will certainly help Hims & Hers expand its growth. In the October announcement, the telehealth company wrote that the funds would be used to "continue investing in growth and new product categories to accelerate [Hims & Hers'] goal of becoming the digital front door to the healthcare system." It also outlined the specific growth areas it's eyeing, a list that includes sleep health, fertility, diabetes and cholesterol.
THE LARGER TREND
For outside investors, the listing is another chance to get in on telehealth. This market that has seen handful of new entrants in the form of Amwell's IPO and subsequent SPAC, or the SPAC deal from SOC Telemed (formerly Specialists on Call). Those eyeing Hims & Hers are likely hoping for a stock performance similar to that of Teladoc Health, which saw its ticker price skyrocket over the course of the past year.
Looking at the broader digital health landscape, there's been little shortage of public market exits over the past 12 months. Between IPOs and SPACs, the industry fielded listings from One Medical, Accolade, Nanox, GoodRx, Clover Health, Eargo, Butterfly Network and, most recently, Talkspace.