Alex Rodriguez and Jennifer Lopez’s Hims & Hers Investment Pays With Oaktree SPAC

Alex Rodriguez’s post-baseball business empire is scoring its first stock market victory, as telehealth and personal care unicorn Hims & Hers is set to go public by special purpose acquisition company, Variety’s sister publication Sportico exclusively reports. Rodriguez and Jennifer Lopez are venture-round investors in the company, which is merging with Oaktree Acquisition Corp in a deal that values the enterprise at $1.6 billion.

“As an investment, Hims & Hers has been a great model of what the best kind of partnership looks like for us: a company with great fundamentals but also one where our endorsement and support can add meaningful value to enhance the trajectory,” Rodriguez said in an email.

Rodriguez and Lopez invested in Hims & Hers in 2019, around the time venture capitalist enthusiasm for the brand vaulted it to unicorn status, market slang for a start-up that reaches a $1 billion private market valuation. The Oaktree SPAC valuation at 60% more than that means the investment is already paying off handsomely for A-Rod and J.Lo. Their stake could be worth as much as $79 million, based on the fact that they own less than 5% of the equity of the business. Regardless of the specific value, the investment is “a meaningful and important position in their portfolio,” according to an A-Rod Corp. representative. Hims & Hers is also backed by notable venture capitalists, including Founders Fund, an early Facebook backer; Maverick Capital, run by trading legend Lee Ainslie; and RedPoint Ventures, an early investor in DraftKings.

The former Yankee great and his music and acting star partner grabbed headlines last summer when they bid to buy the New York Mets, an effort that fell short to hedge fund Steve Cohen’s successful $2.4 billion deal for the club. The offer for the Mets wasn’t the first business deal they have pursued however. Rodriguez has backed private business efforts for at least 20 years, starting in real estate and expanding into venture investments, most notably buying a small stake in Snapchat while still playing, and taking equity in Dominican beer producer Presidente, for which he also serves as chairman of Presidente USA. He has about 30 business investments overall, he told attendees of the Sportico Live “Business Beyond the Game” event in December.

Hims & Hers is a direct-to-consumer firm that began as a Viagra-by-mail prescriber but has evolved its primary focus to telemedicine, along with mental health support offerings and the sale of personal care products focused on hair, skin and sexual health. The company disclosed it has about 260,000 medical prescription subscribers as of June and has held more than one million telehealth appointments.

“Hims & Hers is a great business we were excited to get behind because its mission reflects our values: convenient, accessible, quality healthcare for everyone, from anywhere,” Rodriguez also said in his email.

Investor reaction to Hims & Hers going public has been very positive, with Oaktree Acquisition’s shares gaining more than 60% since the deal was announced on October 1.

Oaktree Acquisition Corp. is a SPAC sponsored by the large Los Angeles money manager Oaktree. The blank-check firm raised $175 million in a 2019 IPO. SPACs are companies that raise capital at an IPO with the intent of buying another company that wishes to go public without the time and regulatory burden of a traditional IPO. The merger of Hims & Hers and the Oaktree SPAC is being put to a shareholder vote next week and should close shortly afterward.

Source: Read Full Article