INDIANAPOLIS –Â Historic car collector insurer Hagerty will combine with Aldel Financial via a special purpose acquisition company.
Hagerty Insurance is focused on the automotive enthusiast market. They offer insurance products and programs for car owners across the world. Hagerty has been expanding their offerings through membership, entertainment and events. They operate the Hagerty Drivers Club, DriveShare collector car rental, MotorsportReg.com and various Concours d’Elegance and car show events.
Aldel Financial Inc. is a recently formed blank check company whose purpose was to look for merger opportunities. Also known as SPACs, they have grown in popularity to raise capital and take companies public without going through the traditional initial public offering process.
Located in Traverse City, Mich., Hagerty is led by McKeel Hagerty and has about 1,500 employees. For 2021, it is expected to generate about $500 million in revenue and EBITDA of $38 million. The majority of its sales are tied to insurance premiums with membership programs fees become more significant.
Aldel was started by Robert Kauffman, a respected financial and automotive motorsports executive based in Charlotte, N.C. He is Chairman of the Race Team Alliance, co-owner of Chip Ganassi Racing (whose NASCAR teams were recently sold to Justin Marks of Trackhouse Racing), and owner of RK Motors, a leading restorer and reseller of classic cars, and advisory board member of McLaren Racing.
The transaction is valued at more than $3 billion. Equity towards the deal will include about $115 million from the Aldel offering proceeds and a $700 million PIPE investment from State Farm and Merkel Corp. Â
The deal is expected to close in the fourth quarter of 2021 and is subject to approval of shareholders. It is anticipated to traded on the NYSE under the symbol, HGTY.
Advisors to Hagerty included J.P Morgan and Sidley Austin. Global Leisure Advisors and Loeb & Loeb worked with Aldel.