The transaction values Hagerty at a pro forma company value of $ 3.13 billion and will provide cash proceeds to advance Hagerty’s strategy to accelerate its digital innovation initiatives. The business combination agreement includes a fully committed PIPE of $ 704 million led by strategic partners State Farm and Markel Corporation and top institutional investors.
Hagerty insures more than two million vehicles worldwide and has a membership of more than 1.8 million vehicle enthusiasts. The company has invested in an omni-channel insurance sales model that enables it to reach the full addressable market and scale across national insurance partners, local agents and brokers, and direct sales.
Over the past several years, Hagerty has built a unique membership model powered 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 platform, and HOSTY’s proprietary rating tools.
“Today’s announcement is an exciting step forward for Hagerty,” said McKeel Hagerty, CEO of Hagerty. “We are delighted to be working with Rob and the Aldel team, who bring extensive expertise and strategic relationships in the automotive, insurance and financial sectors that are a key strategic advantage for Hagerty.
“We believe this transaction will help accelerate Hagerty’s many growth opportunities and fulfill our bold mission of building the world’s best automotive enthusiast brand and preserving driving and car culture for future generations.
“Looking ahead, we’re focused on investing in Hagty’s digital user interfaces to support our growing membership base as we continue to build our portfolio with exciting auto events and exciting services like DriveShare by Hagerty and Hagerty Garage + Social Clubhouses. ”
Robert I. Kauffman, Chairman & CEO of Aldel, said, “We are very excited to be working with McKeel and his team to help them grow and achieve our common goals. We went through an extensive process and Hagerty represented what we were looking for in a partner for Aldel and our shareholders.
“Hagerty offers a very differentiated growth story with great market opportunities. The company also has a proven financial profile with a predictable and consistent revenue model, as well as a strong corporate culture and leadership model. We believe our complementary skills and contacts will further accelerate the Hagerty flywheel. “
The transaction is expected to provide the combined company with gross proceeds of up to 820 million. Current Aldel shareholders who do not exercise their redemption rights will contribute 100% of their equity to the combined company.
The transaction is expected to close in the fourth quarter of 2021, subject to final shareholder / owner approval, customary closing conditions, and any applicable government approvals.