Hagerty, an automotive lifestyle brand and specialist insurer for classic and enthusiast vehicles, has today announced a merger agreement with Aldel Financial Inc., a special purpose acquisition company (SPAC), which will enable Hagerty to become a publicly traded company.
Upon the closing of the deal, which has been unanimously approved by Aldel’s board of directors and the independent members of Hagerty’s board, Aldel will be renamed Hagerty, Inc. It will become publicly traded, with its common stock expected to be listed on the New York Stock Exchange under the ticker HGTY.
The transaction values Hagerty at a pro forma enterprise value of $3.13 billion and provides cash proceeds to fuel Hagerty’s strategy to accelerate its digital innovation initiatives. The business combination agreement includes a $704 million fully committed PIPE led by strategic partners State Farm and Markel Corporation, as well as top tier institutional investors.
Hagerty insures more than two million vehicles globally and has a membership of more than 1.8 million vehicles enthusiasts. The company has invested in an omni-channel insurance distribution model that enables it to reach the entire addressable market and to scale through national insurance partners, local agents and brokers, and direct distribution.
In recent years, Hagerty has built out a unique membership model, which is supported by the Hagerty Drivers Club, more than 2,500 automotive events annually (including the recently acquired Amelia Island Concours d’Elegance), an expanding automotive media content platform, and Hagerty’s proprietary valuation tools.
“Today’s announcement is an exciting step forward for Hagerty,” said McKeel Hagerty, CEO of Hagerty. “We are thrilled to partner with Rob and the Aldel team, who bring extensive expertise and strategic relationships in the automotive, insurance and financial sectors that will be a key strategic advantage for Hagerty.
“We believe this transaction will help to accelerate Hagerty’s many growth opportunities and realize our bold mission to build the best automotive enthusiast brand in the world and save driving and car culture for future generations.
“As we look ahead, we are focused on investing in Hagerty’s digital user experience interfaces to support our growing membership base, while we continue to expand our portfolio with highly engaging car events and exciting services like DriveShare by Hagerty and Hagerty Garage + Social clubhouses.”
Robert I. Kauffman, chairman & CEO, Aldel, said: “We couldn’t be more excited to work with McKeel and his team to help them grow and reach our collective goals. We ran an extensive process, and Hagerty represented what we were looking for in a partner for Aldel and our stockholders.
“Hagerty offers a highly differentiated growth story with a large market opportunity. The company also has a proven financial profile with a predictable and consistent revenue model and strong corporate culture and leadership model. We believe our complimentary skills and contacts will further accelerate the Hagerty flywheel.”
The deal is expected to deliver up to $820 million of gross proceeds to the combined company, including the contribution of up to $116 million of cash held in Aldel’s trust account from its initial public offering in April 2021, assuming no redemptions. Current Aldel stockholders who don’t exercise their redemption rights will roll 100% of their equity into the combined company.
The transaction is expected to close in the fourth quarter of 2021, subject to final stockholder/owner approvals, customary closing conditions, and any applicable regulatory approvals.