Classic car insurer Hagerty to go public via SPAC in $3 billion deal

The Hagerty Price Guide predicts total sales of $ 378 million from next week’s Monterey collector car auctions, spread across 1,400 vehicles offered by six different auction companies across the Monterey Peninsula to the Pebble Beach Concours dElegance.

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The classic car insurance company Hagerty goes public through a special acquisition company valued at more than 3 billion US dollars.

The merger with Aldel Financial gives stock market investors the opportunity to invest in the fast growing classic car market, which has seen a huge surge in ratings and popularity over the past few years. According to the Knight Frank Luxury Investing Index, classic car values ​​are up 6% over the past year and 193% over the past decade.

In addition to offering insurance, Hagerty has also set up a classic car rental company called Hagerty DriveShare, acquiring events and other classic car-related businesses, including rating tools, memberships and special content for car enthusiasts.

Classic car prices have benefited from the pandemic as a new wave of investors began buying classic cars online through sites like Bring a Trailer Auctions, which are now owned by Hearst Cars. At Monterey Car Week, which ended on Sunday, total classic car auction sales rose 35% from 2019 to $ 345 million.

“Covid actually accelerated certain people’s interest in cars if they had it before,” Hagerty CEO McKeel Hagerty told CNBC. “You know, when you work from home and maybe you don’t have all the options to travel and do all the different things, cars have been an easy choice for people. You could go out and have a fun ride whatever car you had. “

Hagerty says it insures more than 2 million vehicles worldwide and has partnerships with nine of the top 10 US auto insurers. The company estimates the market for classic and specialty cars at over 43 million vehicles.

The deal with Aldel includes a private investment of $ 704 million in public equity (PIPE) led by insurer State Farm and Markel Corp. The merger is expected to generate gross proceeds of $ 820 million for the merged company.

Aldel, which raised $ 115 million when it went public in April, was founded by Robert Kauffman, a co-founder of the Fortress Investment Group and owner and driver of a racing team. Upon completion of the transaction, the company will trade on the New York Stock Exchange under the ticker symbol HGTY.

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