- Hims & Hers is a telehealth leader modernizing the delivery
and accessibility of digital, consumer-focused healthcare
services
- Transaction will enable further investment in growth and new
product categories that will accelerate Hims & Hers’ plan to
become the digital front door to the healthcare system
- Combined company to have an implied initial enterprise value of
approximately $1.6 billion, with the company expected to have an
estimated $330 million in cash after closing
- Top-tier investors, including Franklin Templeton and clients of
Oaktree, anchoring a $75 million PIPE
- Leading existing institutional backers of Hims & Hers,
including Founders Fund, Forerunner Ventures, IVP, Redpoint
Ventures, Thrive Capital, McKesson Ventures, and the Canadian
Pension Plan Investment Board intend to roll 100% of their
equity
Hims, Inc. (“Hims & Hers” or the “Company”), a market
leading telehealth company, and Oaktree Acquisition Corp. (NYSE:
OAC.U, OAC, OAC WS), a special purpose acquisition company
sponsored by an affiliate of Oaktree Capital Management, L.P.
(“Oaktree”), announced today that they have entered into a
definitive merger agreement. Upon completion of the transaction,
the combined company’s securities are expected to be traded on the
New York Stock Exchange (NYSE) under the symbol “HIMS.”
Company Overview
Launched in 2017, Hims & Hers has built a proprietary
platform that connects consumers to licensed healthcare
professionals for care across numerous specialties, including
primary care, mental health, sexual health and dermatology, among
others. Since its founding, the Company has facilitated more than
two million telehealth consultations, enabling greater access to
high quality, convenient and affordable care for people in all 50
states. The Company has driven 100%+ compounded annual revenue
growth over the last two years and has more than doubled gross
margins to 70%+, with revenue that is over 90% recurring in
nature.
The future of healthcare will be led by consumer brands that
empower people and give them full control over their healthcare. A
direct relationship with consumers is the most valuable component
in the healthcare system. Hims & Hers has endeavored to build a
healthcare system that squarely focuses on the needs of the
healthcare consumer. Hims & Hers directs the consumer
experience from start to finish, uniquely positioning the Company
in the rapidly-emerging telemedicine landscape to lead the industry
in B2C-focused telehealth solutions.
Hims & Hers has built a strong customer base of highly loyal
brand ambassadors who represent the future of the healthcare
system. The Company’s customers embrace its convenient, digitally
native product, generating organic growth through word of mouth and
user-generated content, which enhances brand awareness and lowers
customer acquisition costs. The majority of its consumers are
millennials, a high-value generation at the beginning of its
lifetime value curve that is poised to expand its purchasing power.
The Hims & Hers platform is set up to serve these customers
over the long-term by offering great user experience and access to
high quality medical care.
As of June 2020, Hims & Hers had approximately 260,000
subscriptions on the platform.
Management Comments
“We’re thrilled to partner with Oaktree Acquisition Corp. to
usher Hims & Hers into our next phase of growth as we work to
become the front door to the healthcare system, serving as the
first stop for peoples’ health and wellness needs across hundreds
of conditions,” said Andrew Dudum, CEO and founder of Hims &
Hers. “Hims & Hers was founded to make it easier and more
affordable for everyone to get the healthcare they need. We remain
committed to advancing that goal as we expand into new categories
of care and build an enduring healthcare company that brings
choice, affordability and access to consumers.”
“We are very pleased to launch our Oaktree Acquisition Corp.
franchise with this partnership with Hims & Hers, a
rapidly-growing provider of much-needed innovation to the
healthcare system,” said Howard Marks, Co-Chairman of Oaktree.
“This transaction shows Oaktree Acquisition Corp. to be a
complementary extension of Oaktree’s capabilities and builds on our
strength in sourcing opportunities throughout the market
cycle.”
“We founded Oaktree Acquisition Corp. to partner with a high
quality, growing company that will benefit from a public currency
for its next leg of growth,” said Patrick McCaney, CEO of Oaktree
Acquisition Corp. “Hims & Hers is an ideal match and represents
a unique opportunity to invest in a rapidly-growing company that is
modernizing the delivery and accessibility of healthcare and
wellness solutions. Over the past two years, the Company has
experienced significant growth bolstered by the continuing
widespread adoption of telehealth and digital patient care
solutions – and we think this is just the beginning. We look
forward to partnering with Hims & Hers to accelerate the
expansion of its high-quality, end-to-end care services across the
broader healthcare marketplace.”
Key Transaction Terms
The business combination values the combined company at an
enterprise value of approximately $1.6 billion and is expected to
deliver up to $280 million of cash to the combined company through
the contribution of up to $205 million of cash held in Oaktree
Acquisition Corp.’s trust account, and a $75 million concurrent
private placement (PIPE) of common stock of the combined company,
priced at $10.00 per share, from leading institutional investors,
including funds managed by Franklin Templeton and certain Oaktree
clients. The enterprise value equals 8.9x estimated 2021 revenue
and 12.2x estimated 2021 gross profit, an attractive valuation
relative to telehealth peers despite the Company’s leading growth
and margin profile.
As part of the transaction, Hims & Hers’ current management
and existing equity holders will roll nearly 100% of their equity
into the combined company. Leading existing institutional backers
of the Company including Founders Fund, Forerunner Ventures, IVP,
Redpoint Ventures, Thrive Capital, McKesson Ventures, and the
Canadian Pension Fund intend to roll 100% of their shares and the
transaction agreement provides for up to $75 million of cash
consideration at closing to shareholders, at their election.
Assuming no public shareholders of Oaktree Acquisition Corp.
exercise their redemption rights and before any potential cash
consideration to Hims & Hers shareholders, current Hims &
Hers equity holders will own approximately 84%, Oaktree Acquisition
Corp. shareholders will own approximately 12%, and PIPE investors
will own approximately 4% of the issued and outstanding shares of
common stock, respectively, of the combined company at closing.
Furthermore, the combined company will be capitalized with up to
$330 million in cash, including proceeds received from the
transaction together with existing cash on Hims & Hers’ balance
sheet. The business combination includes a minimum cash closing
condition of $200 million, which is calculated as cash delivered
from Oaktree Acquisition Corp.’s trust account, plus cash delivered
from the PIPE, minus the up to $75 million of cash consideration at
closing to shareholders as described above. Hims & Hers intends
to continue investing in growth and new product categories to
accelerate its goal of becoming the digital front door to the
healthcare system.
The transaction, which has been unanimously approved by the
Boards of Directors of each Hims & Hers and Oaktree Acquisition
Corp., is subject to approval by Oaktree Acquisition Corp.’s
shareholders and other customary closing conditions. The
transaction is expected to close in the fourth quarter of 2020.
A more detailed description of the transaction terms and a copy
of the Agreement and Plan of Merger will be included in a current
report on Form 8-K to be filed by Oaktree Acquisition Corp. with
the United States Securities and Exchange Commission (the “SEC”).
Oaktree Acquisition Corp. will file a registration statement (which
will contain a proxy statement/ prospectus) with the SEC in
connection with the transaction.
Advisors
LionTree Advisors is serving as exclusive financial advisor to
Hims & Hers and Gunderson Dettmer Stough Villeneuve Franklin
& Hachigian LLP is serving as legal counsel.
Credit Suisse and Deutsche Bank Securities are serving as
capital markets advisors and private placement agents to Oaktree
Acquisition Corp. Deutsche Bank Securities is acting as financial
advisor to Oaktree Acquisition Corp. Kirkland & Ellis LLP is
serving as legal counsel to Oaktree Acquisition Corp.
Management Presentation
A presentation made by the management teams each of Hims &
Hers and Oaktree Acquisition Corp. regarding the transaction will
be available on the websites of Oaktree Acquisition Corp. at
https://www.oaktreeacquisitioncorp.com/news and Hims & Hers at
forhims.com/investor and forhers.com/investor. Oaktree Acquisition
Corp. will also file the presentation with the SEC as an exhibit to
a Current Report on Form 8-K, which can be viewed on the SEC’s
website at www.sec.gov.
About Hims & Hers
Hims & Hers is a multi-specialty telehealth platform that
connects consumers to licensed healthcare professionals, enabling
them to access high quality medical care for numerous conditions
related to primary care, mental health, sexual health, dermatology,
and more. Launched in November 2017, the company also offers
thoughtfully created and curated health and wellness products. With
products and services available across all 50 states and
Washington, D.C., Hims & Hers is able to provide all Americans
access to quality, convenient and affordable care through a
computer or smartphone. Hims & Hers was founded by CEO Andrew
Dudum, Hilary Coles, Jack Abraham and Joe Spector at venture studio
Atomic in San Francisco, California. For more information about
Hims & Hers, please visit forhims.com and forhers.com.
About Oaktree Acquisition Corp.
The Oaktree Acquisition Corp. franchise was formed to partner
with high-quality, growing companies to facilitate their successful
entry to the public markets. By leveraging the deep capabilities
and experience of its sponsor, an affiliate of Oaktree, which
manages $122 billion in assets under management as of June 30,
2020, Oaktree Acquisition Corp. seeks to provide best-in-class
resources and execution, coupled with a focus on long-term
partnership and shareholder value creation. For more information
about Oaktree Acquisition Corp. or Oaktree Acquisition Corp. II,
please visit oaktreeacquisitioncorp.com.
Additional Information and Where to Find It
Oaktree Acquisition Corp. intends to file with the SEC a
Registration Statement on Form S-4 containing a proxy
statement/prospectus relating to the proposed business combination,
which will be mailed to its shareholders once definitive. This
press release does not contain all the information that should be
considered concerning the proposed business combination and is not
intended to form the basis of any investment decision or any other
decision in respect of the proposed business combination. Oaktree
Acquisition Corp.’s shareholders and other interested persons are
advised to read, when available, the preliminary proxy
statement/prospectus and the amendments thereto and the definitive
proxy statement/prospectus and other documents filed in connection
with the proposed business combination, as these materials will
contain important information about the Company, Oaktree
Acquisition Corp. and the proposed business combination. When
available, the definitive proxy statement/prospectus and other
relevant materials for the proposed business combination will be
mailed to shareholders of Oaktree Acquisition Corp. as of a record
date to be established for voting on the proposed business
combination. Shareholders of Oaktree Acquisition Corp. will also be
able to obtain copies of the preliminary proxy
statement/prospectus, the definitive proxy statement/prospectus and
other documents filed with the SEC, without charge, once available,
at the SEC’s website at www.sec.gov, or by directing a written
request to: Oaktree Acquisition Corp., 333 South Grand Avenue, 28th
Floor, Los Angeles, California.
Participants in the Solicitation
Oaktree Acquisition Corp. and its directors and executive
officers may be deemed participants in the solicitation of proxies
from Oaktree Acquisition Corp.’s shareholders with respect to the
proposed business combination. A list of the names of those
directors and executive officers and a description of their
interests in Oaktree Acquisition Corp. is contained in Oaktree
Acquisition Corp.’s annual report on Form 10-K for the fiscal year
ended December 31, 2019, which was filed with the SEC and is
available free of charge at the SEC’s web site at www.sec.gov, or
by directing a written request to Oaktree Acquisition Corp., 333
South Grand Avenue, 28th Floor, Los Angeles, California. Additional
information regarding the interests of such participants will be
contained in the proxy statement/prospectus for the proposed
business combination when available.
Hims & Hers and its directors and executive officers may
also be deemed to be participants in the solicitation of proxies
from the shareholders of Oaktree Acquisition Corp. in connection
with the proposed business combination. A list of the names of such
directors and executive officers and information regarding their
interests in the proposed business combination will be included in
the proxy statement/prospectus for the proposed business
combination when available.
Forward-Looking Statements
Certain statements in this press release may be considered
forward-looking statements. Forward-looking statements generally
relate to future events or Oaktree Acquisition Corp.’s or Hims
& Hers’ future financial or operating performance. For example,
statements about the expected timing of the completion of the
proposed business combination, the benefits of the proposed
business combination, the competitive environment, and the expected
future performance (including future revenue, pro forma enterprise
value, and cash balance) and market opportunities of Hims &
Hers are forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as “may”,
“should”, “expect”, “intend”, “will”, “estimate”, “anticipate”,
“believe”, “predict”, “potential” or “continue”, or the negatives
of these terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward looking
statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Oaktree
Acquisition Corp. and its management, and Hims & Hers and its
management, as the case may be, are inherently uncertain. Factors
that may cause actual results to differ materially from current
expectations include, but are not limited to: (1) the occurrence of
any event, change or other circumstances that could give rise to
the termination of the definitive agreements with respect to the
proposed business combination; (2) the outcome of any legal
proceedings that may be instituted against Oaktree Acquisition
Corp., Hims & Hers, the combined company or others following
the announcement of the proposed business combination; (3) the
inability to complete the proposed business combination due to the
failure to obtain approval of the shareholders of Oaktree
Acquisition Corp. or to satisfy other conditions to closing,
including the satisfaction of the minimum trust account amount
following any redemptions; (4) changes to the proposed structure of
the business combination that may be required or appropriate as a
result of applicable laws or regulations or as a condition to
obtaining regulatory approval of the proposed business combination;
(5) the ability to meet stock exchange listing standards at or
following the consummation of the proposed business combination;
(6) the risk that the proposed business combination disrupts
current plans and operations of Hims & Hers as a result of the
announcement and consummation of the proposed business combination;
(7) the ability to recognize the anticipated benefits of the
proposed business combination, which may be affected by, among
other things, competition, the ability of the combined company to
grow and manage growth profitably, maintain relationships with
customers and suppliers and retain its management and key
employees; (8) costs related to the proposed business combination;
(9) changes in applicable laws or regulations; (10) the possibility
that Hims & Hers or the combined company may be adversely
affected by other economic, business, and/or competitive factors;
(11) the limited operating history of Hims & Hers; (12) the
Hims & Hers business is subject to significant governmental
regulation; (13) the Hims & Hers business may not successfully
expand into other markets, including womens’ health; and (14) other
risks and uncertainties set forth in the section entitled “Risk
Factors” and “Cautionary Note Regarding Forward-Looking Statements”
in Oaktree Acquisition Corp.’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2019, and which will be set forth in
registration statement on Form S-4 to be filed by Oaktree
Acquisi-tion Corp. with the SEC in connection with the proposed
business combination.
Nothing in this press release should be regarded as a
representation by any person that the forward-looking statements
set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements will be achieved. You
should not place undue reliance on forward-looking statements,
which speak only as of the date they are made. Neither Oaktree
Acquisition Corp. nor Hims & Hers undertakes any duty to update
these forward-looking statements.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential business combination and shall not
constitute an offer to sell or a solicitation of an offer to buy
the securities of Oaktree Acquisition Corp., the Company or the
combined company, nor shall there be any sale of any such
securi-ties in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of the Securities Act of
1933, as amended.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201001005420/en/
Investor Relations
Hims & Hers Bob East or Jordan Kohnstam Westwicke, an
ICR company HIMSIR@westwicke.com (443) 213-0500
Oaktree Acquisition Corp.
infoOAC1@oaktreeacquisitioncorp.com
Media Relations
Hims & Hers Chelsea Harrison
charrison@forhims.com
Sean Leous Westwicke, an ICR company HIMSPR@westwicke.com (646)
866-4012
Oaktree Acquisition Corp.
mediainquiries@oaktreecapital.com
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