Healthcare Business International interviews Nelson Advisors discussing the Hims & Hers acquisition of Eucalyptus
- Nelson Advisors
- Feb 26
- 4 min read
Updated: Feb 27
Nelson Advisors Partner Lloyd Price has been interviewed by Healthcare Business International regarding hims & hers acquisition of Australian Digital Health platform Eucalyptus
Lloyd Price, partner at M&A advisory firm Nelson Advisors, a Boutique Investment Bank focused exclusively on the healthcare technology (healthtech) and medical technology (medtech) sectors, tells HBI the acquisition serves both defensive and offensive purposes.
“Strategically, it hedges against rising US regulatory risks surrounding compounded GLP‑1 drugs and DTC (direct-to-consumer) advertising, which have already impacted Hims through investigations and strained partnerships,” Price tells us.
The move comes amid scrutiny of Hims & Hers’ compounded GLP-1 offerings, including a withdrawn copy of the compounded version of weight loss pill Wegovy from Danish drugmaker Novo Nordisk, which triggered action from the Food and Drug Administration and a patent lawsuit. Despite strong growth in 2025, where the company recorded a 59% year- over-year growth in revenue to $2.35 billion, shares fell over 7% due to weaker than expected 2026 guidance.
Strategic buyers are increasingly using acquisitions to expand into new markets and patient populations, as shown by Hims’ purchase of Eucalyptus, rather than traditional and local market-focused ‘buy and build’ strategies. Buyers now prefer scaled, multi‑condition platforms with strong regulatory, clinical, and data credentials over small point solutions, Price tells us.
In the last few months, I have heard the phrase “Venture Capital has seeded and built the digital health market, private equity will now scale and make the market…” says Price.
“High‑growth verticals like metabolic health, behavioural health, community care, and women’s health sit at the centre of a lot of PE fund interest in Europe, the US, and Asia.
Top acquisition targets will be multi‑market‑ready platforms with clinical and regulatory sophistication, well evidenced and demonstrable financial or operational ROI — not just strong user engagement,” he tells us.However, rather than paying high, upfront cash multiples like before 2021, investors now prefer more structured deals with earn‑outs tied to recurring revenue, margin growth, and increasing regulatory strength, as per Price.
“The Hims–Eucalyptus deal exemplifies this range, with a mix of headline and performance‑linked valuation through earn‑outs. As M&A activity rebounds, top‑tier healthtech assets are expected to see modest multiple expansion driven by quality and competition, while weaker assets will stay in discounted, highly structured deal territory,” Price tells HBI.
In terms of the overall market, cross-border appetite for digital health M&A seems to be recovering from the quiet last few years despite remaining “highly selective” as per Price. Buyers are now focused on more “scaled, infrastructure-based and AI‑enabled platforms” while moving away from smaller “pure-play” app models.
“Hims–Eucalyptus fits this pattern as a platform‑to‑platform deal supporting a global integration trend,” Price adds.
Hims & Hers has been bullish on international expansion, having recently pursued a host of acquisitions for the same. In 2025, the firm committed over $330 million toward acquisitions.
“At the core of it is to target the 10 key most critical markets and to win them handily over the next 12 to 24 months across acquisitions of ZAVA and LiveWell, and with the addition of Eucalyptus, I think we have those critical pieces in place,” Dudum said during the company’s earnings call.
Zava is a European telemedicine platform, while LiveWell is a Canadian digital health platform. Hims & Hers also closed the acquisition for YourBio, a startup offering painless at-home blood tests, in 2026 for approximately $150 million, which we previously reported on.
The telehealth platform expects to earn around $200 million from international markets in 2026, as per its initial outlook, including any additional contributions from the Eucalyptus acquisition, Yemi Okupe, the company’s chief financial officer, said during the latest earnings call.
Price tells us that healthtech valuation multiples normalised in 2025 to around 4x to 6x revenue multiples, rising to 6x to 8x for “differentiated assets with proprietary AI, strong data moats, or value‑based care alignment”. For less scalable models, valuations have fallen to 3x or 4x.
The momentum in cross-border deals is expected to continue in 2026–27, in terms of both strategics and PE, with 2026 expected to bring more large, strategic acquisitions.
“Scaled virtual‑care platforms, interoperability and automation infrastructure plus AI native and data‑rich assets are likely to command valuation premiums,” adds Price.
In terms of potential risks and opportunities, Price tells us that, according to him, private equity now views consumer digital health as a split asset class where the attractiveness of investment differs between scaled and sub-scale CAC (customer acquisition cost)- heavy, DTC models.
“The digital health sector is maturing from hype to core healthcare infrastructure, demanding stronger proof of value, compliance, and sustainable cash flow amid a higher‑cost‑of‑capital environment. Key risks include rising customer acquisition costs, regulatory shocks, data security lapses, over‑reliance on single therapies or geographies, and exit saturation among mid‑tier assets,” he says.
After the acquisition is completed, Tim Doyle, current CEO of Eucalyptus, will become the
SVP of International at Hims & Hers, overseeing the firm’s international business.
Comments