Hagerty, an insurer of classic cars, has agreed to go public through a merger with SPAC Aldel Financial Inc in a deal that values it at $3.13 billion, the companies said on Wednesday.
Hagerty provides insurance cover for collectible vehicles that are not driven daily, and offers lower prices than standard insurers. It says it has insured more than 2 million vehicles globally.
Hagerty was launched in 1984 by Frank and Louise Hagerty after they could not find good insurance coverage for their wooden boats. The company initially focused on providing coverage for antique boats, and later expanded into cars and other vehicles.
The deal with Aldel includes a $704 million private investment in public equity (PIPE), led by insurer State Farm and financial holding firm Markel Corp.
The merger is expected to deliver up to $820 million of gross proceeds to the merged company, Hagerty said. The deal will close in the fourth quarter of 2021, after which Hagerty will trade on the New York Stock Exchange under the ticker symbol “HGTY.”
Special purpose acquisition companies, or SPACs, such as Aldel use capital raised through their IPOs to take a private company public. Aldel raised $115 million in its IPO in April. (Reporting by Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)