Hagerty Goes Public, Amidst Rapid Collector Car Expansion

• Specialty insurance company Hagerty went public via SPAC last week.

• The company has acquired several classic car events fairly recently, and owns a network of garages that double as social spaces.

• The CEO and Hagerty family maintain majority ownership in the company.

On December 3, Hagerty—the specialist car insurance provider for enthusiasts that also defines itself as an automotive lifestyle brand—went public, and will henceforth be traded on the New York Stock Exchange under the symbols HGTY and HGTY.WS. The December 1 deal that got Hagerty listed is a merger with Aldel Financial Inc., a special purpose acquisition company, commonly known as a SPAC.

The merger included a $704 million investment led by State Farm and Markel Corporation, but including other parties. As a result of the transaction, Hagerty had a pro forma enterprise value of $3.13 billion. The stock was up in early trading.

Hagerty has been on a tear lately, acquiring three well-regarded concours d’elegance, in Greenwich, Connecticut, Detroit, Michigan and Amelia Island, Florida, plus the California Mille drive event. It is also growing a network of Garage + Social locations that combine luxury housing for classic cars with a gathering place for their owners.

In an interview, CEO McKeel Hagerty said the SPAC process is “uniquely suited for a closely held company like ours to get early access to the capital markets. It will allow us to do more things, and better serve our members and employees.”

Donald Osborne, CEO of the Audrain Automobile Museum in Newport, Rhode Island, said that Hagerty going public is “a terrific thing,” but he pointed out that, for investors, Hagerty’s move is primarily about the core insurance business. “It’s not likely that equity investors are primarily interested in the California Mille or the Greenwich Concours,” he said. “Classic car insurance is a very safe bet.”

Peter Neumann, co-founder and CEO of Chrome Strategies Management, which advises collectors, said that Hagerty “sees an opportunity to widen the awareness of its brand with experiential elements, and also draw in more clients for its insurance business.”

Collector car growth is definitely in the company’s plans. About Garage + Social, Hagerty said, “We view it as a network of physical locations that includes a clubhouse where people can socialize, with 10 of the sites as our initial proof of concept. We will have seven locations by the early part of next year, including a new Pacific Northwest location in Seattle. It can grow from there—maybe to 40 or 50.” Current locations include Bedford, New York, two locations in Florida, Chicago, and Toronto.

Hagerty also said that that going public was relatively painless. “We had to sell very little of the company to go public. My family remains the majority stock owner, and I remain CEO—with a rock-star board. I think we threaded a needle here.”

Although the company may make other acquisitions, Hagerty said it’s not likely to diversify outside “our tight focus on the car lover.” Hagerty insures two million cars globally, its Hagerty Drivers Club has 1.8 million members, and its magazine 1.2 million readers. It also operates DriveShare, a peer-to-peer service that rents out classic cars.

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