(Reuters) - Hims Inc, a U.S. online provider of mens’ healthcare and consumer products ranging from hair loss treatments to Viagra, is exploring going public through a merger with a blank-check acquisition company that could value it at more than $1 billion, according to people familiar with the matter.
Hims, whose venture capital investors include billionaire Peter Thiel’s Founders Fund, Redpoint Ventures and SV Angel, has been capitalizing on rising demand for telemedicine consultations amid the coronavirus outbreak by using its website to connect consumers seeking to buy prescription medicines with physicians.
Hims is working with investment bank LionTree Advisors LLC on negotiating a potential sale to a so-called special purpose acquisition company (SPAC), the sources said, requesting anonymity to discuss confidential discussions.
SPACs raise money in an initial public offering (IPO) to pursue an acquisition without telling their investors in advance which specific company they will buy. The sources cautioned that there is no certainty that Hims will secure a sale to a SPAC and that other deal options are also being considered.
Hims and LionTree declined to comment.
Hims raised $100 million in a private fundraising round in January 2019 at a $1 billion valuation, according to research firm PitchBook.
The San Francisco-based company was launched in November 2017 by its CEO Andrew Dudum, who is also the co-founder of Atomic, a venture capital firm backed by investors Peter Thiel and Marc Andreessen. In 2018, the company branched out into women’s health when it launched Hers, a website that sells birth control, skincare, and other drugs.
Hims has partnered with celebrities Jennifer Lopez and Alex Rodridguez in a bid to expand its reach through social media and popular culture.
A merger between Hims and a SPAC would be the latest in a wave of such deals in the wake of the pandemic, as many privately-held companies seek to bypass a crowded IPO market.
Earlier this month, healthcare services provider MultiPlan inked a $11 billion deal to go public by merging with blank-check company Churchill Capital Corp III CCXX.N, while electric car maker Fisker agreed to go public through a $2.9 billion deal with a blank-check company backed by buyout firm Apollo Global Management Inc (APO.N).
Reporting by Rebecca Spalding in New York, Joshua Franklin in Pompano Beach, Florida and Anirban Sen in Bengaluru; Additional reporting by Krystal Hu in New York; Editing by Nick Zieminski