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Highlights
- Hagerty is set to combine with black check corporation Aldel Financial in a deal estimated to be around US$ 3.13 billion.
- Hagerty is a Michigan-based classic car insurance company.
- Once the merger deal closes, Hagerty is expected to go up on the New York Stock Exchange.
Classic car insurer Hagerty is set to go public, and it is planning to take the merger route with a blank check company to do so.
The Michigan-based car insurance company claims that it has insured more than two million vehicles worldwide. It is also said to have partnerships and a unique membership model with nine automobile insurers in the US.
As per the company website, the classic car insurer's diverse portfolio includes Hagerty Drivers Club, MotorsportReg and Hagerty DriveShare among others.
Aldel Financial SPAC Merger with Hagerty
The car insurer is set to merge with special purpose acquisition company Aldel Financial in a deal estimated to be around US$ 3.13 billion. The merger seems important for retail investors as it will give them a chance to invest in the rapidly growing classic car market.
As per the Knight Frank Luxury Investing Index, the value for classic cars has surged by 193 per cent over the past decade and by six per cent in the last one year.
Source: Demidovichphotostock/Megapixl.com
Some reports note that the merger with Aldel Financial includes a private investment of US$ 704 million in public equity, which was led by State Farm and Markel Corp. This seems to be one of the most important aspects of the deal as the merger is likely to bring US$ 820 million of gross proceeds to the combined entity.
Established by Robert Kauffman, Aldel had raised US$ 115 million in gross proceeds at the time of the initial public offering (IPO) in April this year.
Once the merger deal closes, Hagerty is expected to go up on the New York Stock Exchange and trade with the ticker, 'HGTY'.
Bottomline
Since the company has a diverse portfolio, it seems that Hagerty has the potential to emerge as a market leader in different segments. For example, Hagerty Drivers Club organizes over 2,500 automotive events annually and attracts people.
Recently, the company also acquired Amelia Island Concours d’Elegance, one of the top automotive events in the world.
The insurer also has a classic car rental business. As the economy picks up amid increased vaccinations, people who have spent almost two years at home would want to spend leisure time outside, and Hagerty's car rental business might benefit from it.
