Traverse City classic-car insurer Hagerty goes public for $3 billion
Traverse City-based classic-car insurer Hagerty will now also be known by its New York Stock Exchange ticker symbol “HGTY.”
The 37-year old company is going public in a merger with Aldel Financial Inc., a special purpose acquisition company. The deal values Hagerty at a whopping $3.13 billion.
The move comes as Hagerty has aggressively pursued a membership business strategy beyond its core insurance coverage. Hagerty is one of the best known insurers of non-daily driver collectibles — some 2 million vehicles globally. But with its expansive portfolio of publications, auto enthusiast events, and racing offerings, it has a big membership base beyond insurance.
“We’re living in a time when the future of driving is changing in some people’s minds. Will people be driving in the future, will they not be driving? Will there be people interested still in vehicles that are cool and for purposes other than transportation?” Hagerty CEO McKeel Hagerty told Insurance Business America, saying the company wanted to make the insurance experience about more than just buying coverage.
In addition to classic car insurance, Hagerty offers access to everything from Detroit's Concours d'Elegance show to Skip Barber racing schools to MotorsportReg.com — a registration management site for racing events.
“Our stated purpose is to be the organization that saves driving and car culture for future generations, and Hagerty Drivers Club is really for anybody that loves cars — that’s what we built it for,” Hagerty continued. “Anyone who’s of driving age and who is interested in cars can join.”
SPACs such as Aldel use capital raised through their initial public offerings to take private businesses public. The merger is expected to bring up to $820 million to the combined company. The deal will close in the fourth quarter of 2021.
“This investment will surprise a lot of people that think of old cars as dinosaurs, and financial services as high tech. The fact that a SPAC is involved doesn’t make this interesting. The fact that entrepreneurs in Traverse City made a billion-dollar business servicing owners of classic and exotic cars is the real lesson here,” said Michigan economist Pat Anderson, CEO of Anderson Economic Group.
“Hagerty is a true Michigan original,” he added. “When most of the world was steadily ignoring people who loved cars, Hagerty was building a great business understanding their auto passion and serving them well."
Hagerty was launched in 1984 by Frank and Louise Hagerty when they couldn’t find good insurance coverage for their wooden boats. The company started insuring antique boats, then expanded into cars.
Henry Payne is auto critic for The Detroit News. Find him at email@example.com or Twitter @HenryEPayne.