Hagerty Group LLC announced Wednesday it has agreed to merge with a special purpose acquisition company, a deal that is expected to result in the classic car insurance provider becoming publicly-traded on a stock exchange.
Hagerty Canada LLC, a licensed Ontario brokerage, provides insurance for classic cars underwritten by Elite Insurance Company, an Aviva Canada company.
Traverse City, Mich.-based Hagerty Group said Monday its independent board members approved a deal with Aldel Financial Inc. If the deal closes, Aldel will be renamed Hagerty Inc., with shares expected to be listed on the New York Stock Exchange under the ticker HGTY.
A Hagerty Canada spokesperson told Canadian Underwriter Wednesday the deal would include Hagerty Canada.
The transaction was unanimously approved by Aldel’s board of directors and the independent members of Hagerty’s board. The deal is subject to other conditions including approval by Aldel’s stockholders and Hagerty’s owners.
“We believe this transaction will help to accelerate Hagerty’s many growth opportunities and realize our bold mission to build the best automotive enthusiast brand in the world and save driving and car culture for future generations,” Hagerty said Wednesday in a release.
“Hagerty has invested in an omni-channel insurance distribution model that positions the company to unlock the entire addressable market and enables the organization to scale through national insurance partners, local agents and brokers, and direct distribution.”
If approved, the deal is expected to close in the fourth quarter of 2021. More than 40% of Aldel’s stockholders have signed voting agreements in favour.
“The transaction is expected to deliver up to $820 million of gross proceeds to the combined company, including the contribution of up to $116 million of cash held in Aldel’s trust account from its initial public offering in April 2021, assuming no redemptions,” the firms said Wednesday.
Aldel Financial Inc., as a special purpose acquisition company, is setup to implement a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.