Hims & Hers is making a major global expansion with its planned acquisition of Australian digital health company Eucalyptus, a good move for the company as it faces regulatory and legal challenges in the U.S. over its sale of compounded GLP-1s, experts say.
San Francisco-based Hims & Hers is a direct-to-consumer health and wellness platform that provides support for sexual health, weight loss, hair, skin, primary care, mental health and other areas. Eucalyptus, meanwhile, runs consumer-focused virtual clinics and brands, including weight loss platform Juniper, men’s health program Pilot and fertility and reproductive care platform Kin.
The deal, which was announced Thursday, is valued at about $1.15 billion, with $240 million in cash at closing and the rest paid as deferred and performance-based earnouts through early 2029. The acquisition expands Hims & Hers into Australia and Japan, while deepening its presence in the U.K., Germany and Canada. Eucalyptus has served about 775,000 customers.
This is a smart deal for Hims & Hers, according to Michael Abrams, managing partner of Numerof & Associates. The companies are highly complementary as they both provide services that include men’s health, women’s health, weight health and dermatology. They also both share a mission of expanding personalized, consumer-focused healthcare.
In addition, the acquisition sets up Hims & Hers for global expansion while also diversifying its customer and revenue base, he added.
“It seems clear that a prime consideration in Hims & Hers’ acquisition is to pivot from a predominantly U.S.-centric telehealth and DTC care model to a global consumer health platform,” Abrams told MedCity News. “Strategically, the Eucalyptus acquisition gives Hims & Hers geographic diversification away from its core U.S. markets — a move likely designed in part to de-risk revenue concentration and broaden patient bases.”
This is especially desirable for Hims & Hers as it faces a high-profile lawsuit from Novo Nordisk over the company’s compounded versions of GLP-1s, which are custom-made and include the same active ingredient found in branded GLP-1s like Wegovy, Abrams said. They’re not FDA-approved, and many (including Novo Nordisk) argue they are unsafe.
The lawsuit and scrutiny Hims & Hers is experiencing over the selling of these drugs has put pressure on the company’s stock and highlights “the risks of its U.S. pharmacy-centric model,” Abrams noted.
Another healthcare expert said he is “cautiously optimistic” about the deal, noting that Hims & Hers is trading down due to the crackdown on GLP-1 compounding and the legal issues with Novo Nordisk.
“International expansion in existing product categories will diversify revenue and provide new pipelines for innovation,” said Warren Templeton, managing director at Health2047. “A big unknown is how much GLP-1s are a revenue driver for Eucalyptus, and whether similar legal and regulatory challenges already announced may put downward pressure on the [over-the-counter] grey market. That said, the deal structure seems to acknowledge this with earnouts and deferred payments.”
Beth Mosier, healthcare M&A director at West Monroe, meanwhile, stated that Hims & Hers’ acquisition of Eucalyptus “signals continued expansion across weight loss, anti-aging, mental health, and wellness by extending affordable, personalized, and convenient healthcare to consumers worldwide who are increasingly seeking accessible alternatives to traditional care models.”
The deal is expected to close in the middle of 2026.
Photo: designer491, Getty Images
