Specialty automotive insurance provider offers investors
high-growth trajectory, scalable membership model, a leading
automotive lifestyle brand and a unique value proposition targeting
the expansive and growing automotive enthusiast market
TRAVERSE CITY, Mich.,
Aug. 18, 2021 /CNW/ --
- Hagerty is a leading specialty insurance provider focused on
the global automotive enthusiast market with a scalable, innovative
membership model and robust offerings, including immersive events,
media content and valuation tools
- Transaction values Hagerty at a pro forma enterprise value of
$3.13 billion and provides cash
proceeds to fuel Hagerty's strategy to accelerate its digital
innovation initiatives.
- Transaction includes a $704
million fully committed PIPE led by strategic partners State
Farm and Markel Corporation, as well as top tier institutional
investors.
- Investor presentation to be webcast on August 18th at 8:30 a.m. ET
Hagerty, an automotive enthusiast brand offering a specialty
automotive insurance platform built upon a membership organization
for car lovers, and Aldel Financial Inc. (NYSE: ADF) ("Aldel"), a
special purpose acquisition company, today announced that they have
entered into a definitive business combination agreement. Upon the
closing of the transaction, Aldel will be renamed Hagerty, Inc.,
and become publicly traded, with its common stock expected to be
listed on the New York Stock Exchange under the ticker HGTY.
Passion Fueled Growth Targeting Expansive Automotive
Enthusiast Market
Hagerty is a leading specialty insurance provider for
classic and enthusiast vehicles – with more than 2 million vehicles
insured globally, an industry-leading 84 Net Promoter Score (NPS)
and partnerships with nine of the top 10 U.S. automotive
insurers.
At Hagerty, everything begins and ends with the love of the
automobile – a passion shared with its more than 1.8 million
members that fuels the company's distinguished membership model and
positions Hagerty to optimize growth in the estimated 43+ million
vehicle automotive enthusiast market.
According to Hagerty's proprietary data, there are more than 500
million individuals around the globe who express an interest in
cars and approximately 69 million in the
United States alone who declare themselves automotive
enthusiasts.
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.
Hagerty's highly differentiated membership model helps to drive
loyalty and retention by engaging, entertaining, and connecting
with members at every stop of their journey – digitally, on the
track, in the garage, at an event or on the road. The company's
portfolio includes the innovative Hagerty Drivers Club, more than
2,500 automotive events annually (including the recently acquired
Amelia Island Concours d'Elegance), an expanding automotive media
content platform, and Hagerty's proprietary valuation tools.
Hagerty's unique business model has resulted in a strong track
record of success, including:
- Greater than 25% compounded annual revenue growth rate over the
last three years
- Strong customer retention at 90%
- Average loss ratios significantly lower than the U.S. personal
lines auto insurance industry1
- Millions of individuals following Hagerty's automotive insights
and social media programs
Looking forward, the company expects to achieve continued
double-digit revenue and earnings growth underpinned by its
long-term contracts, solid building blocks and strategic
partnerships.
1
|
P&C industry
average over 2018-2020FY
|
Management Quotes
McKeel Hagerty, CEO of
Hagerty, said: "When it comes to fueling the insatiable
passion of tens of millions of automotive enthusiasts, Hagerty is
well positioned as a leading specialty insurance provider with a
unique subscription and membership model and portfolio of immersive
automotive events, entertainment and valuation tools. For our
members, this means a comprehensive and compelling experience that
goes far beyond an insurance transaction. For our business, this
means market-leading brand loyalty, an attractive business model
with multiple points of monetization, a track record of financial
success and a strong foundation for future growth."
Hagerty continued, "Today's announcement is an exciting step
forward for Hagerty. We are thrilled to partner with Rob and the
Aldel team, who bring extensive expertise and strategic
relationships in the automotive, insurance and financial sectors
that will be a key strategic advantage for Hagerty. 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. As we look ahead, we are
focused on investing in Hagerty's digital user experience
interfaces to support our growing membership base, while we
continue to expand our portfolio with highly engaging car events
and exciting services like DriveShare by
Hagerty and Hagerty Garage + Social
clubhouses."
Robert I. Kauffman, Chairman
& CEO, Aldel, said: "We couldn't be more
excited to work with McKeel and his team to help them grow and
reach our collective goals. We ran an extensive process, and
Hagerty represented what we were looking for in a partner for Aldel
and our stockholders. Hagerty offers a highly differentiated
growth story with a large market opportunity. The company also has
a proven financial profile with a predictable and consistent
revenue model and strong corporate culture and leadership model. We
believe our complimentary skills and contacts will further
accelerate the Hagerty flywheel."
Transaction Overview
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 combination is supported by a $704 million PIPE at $10.00 per share plus 18% warrant coverage
led by strategic investors State Farm and Markel Corporation and
commitments from a group of leading institutional and private
investors.
Existing Aldel stockholders who don't exercise their redemption
rights will roll 100 percent of their equity into the combined
company. All references to available cash from the trust account
and retained transaction proceeds are subject to any
redemptions by the public stockholders of Aldel and payment of
transaction expenses.
The transaction, which has been unanimously approved by Aldel's
board of directors and the independent members of Hagerty's board,
is expected to close in the fourth quarter of 2021, and is subject
to approval by Aldel's stockholders and Hagerty's owners and other
customary closing conditions, including any applicable regulatory
approvals. Over 40% of Aldel's stockholders have signed voting
agreements in favor of the Transaction. The minimum cash condition
will be satisfied via the committed PIPE.
Additional information about the proposed transaction, including
a copy of the business combination agreement and investor
presentation, will be provided in a Current Report on Form 8-K
filed by Aldel today with the Securities and Exchange Commission
("SEC") and available at www.sec.gov.
Advisors
J.P. Morgan Securities LLC (J.P. Morgan) is serving as financial
advisor to Hagerty and Global Leisure Partners LLC (GLP) and
ThinkEquity LLC (ThinkEquity) are serving as financial advisor to
Aldel in connection with the business combination. Sidley Austin
LLP is serving as legal advisor to Hagerty. Loeb & Loeb LLP is
serving as legal advisor to Aldel. GLP and ThinkEquity are serving
as capital markets advisors to Aldel. J.P. Morgan and GLP are
serving as co-placement agents on the PIPE. Mayer Brown LLP and
Jones Day are serving as legal
advisors to the placement agents on the PIPE.
Investor Presentation Information
Management of Hagerty and Aldel will host an investor
presentation on August 18, 2021, at
8:30 a.m. Eastern to discuss the
proposed transaction. A webcast of the call, along with a detailed
investor presentation, will be available on Aldel's website at
www.aldelfinancial.com as well as Hagerty's investor relations
site at http://investor.hagerty.com/.
To participate by phone, please dial (646) 904-5544 or (844)
200-6205 (Toll Free) and enter access code 270573. A telephone
replay will be available through September
17, 2021, and can be accessed by dialing (929) 458-6194 and
entering access code 689079.
About Aldel Financial
Aldel Financial Inc. is a blank check company, also commonly
referred to as a special purpose acquisition company, or SPAC,
whose business purpose is to effect a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses. Led
by Robert I. Kauffman, Chairman and
Chief Executive Officer and co-sponsored by Fundamental Global, the
team at Aldel has decades of experience in identifying attractive
risk adjusted return investments. Aldel raised $116 million in its initial public offering in
April 2021. Aldel's Units, each consisting of one share of
Class A common stock and one-half of one redeemable warrant,
Aldel's shares of Class A common stock, par value $0.0001 per share, and Aldel's warrants, each
exercisable for one share of Class A common stock, are currently
listed on the New York Stock Exchange under the symbols "ADF.U"
"ADF" and "ADF.WS" respectively. For more information, visit
www.aldelfinancial.com.
About Hagerty
Hagerty is a specialty insurance provider focused on the global
automotive enthusiast market and an automotive enthusiast
brand offering integrated membership products and programs. Hagerty
is home to Hagerty Drivers Club, Hagerty DriveShare, Hagerty
Valuation Tools, Hagerty Media, Hagerty Drivers Club magazine,
MotorsportReg, Hagerty Garage + Social, the Amelia Island Concours
d'Elegance, the Concours d'Elegance of America, the Greenwich
Concours d'Elegance, the California Mille, Motorworks Revival and
more. For more information, visit www.hagerty.com.
Forward Looking Statement
This press release may contain certain "forward-looking
statements" within the meaning of "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: "target," "believe,"
"expect," "will," "shall," "may," "anticipate," "estimate,"
"would," "positioned," "future," "forecast," "intend," "plan,"
"project," "outlook" and other similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. Examples of forward-looking statements include,
among others, statements made in this press release regarding the
proposed transactions contemplated by the business combination
agreement and the subscription agreements with respect to the PIPE,
including the benefits of the business combination, integration
plans, expected synergies and revenue opportunities, anticipated
future financial and operating performance and results, including
estimates for growth, the expected management and governance of the
combined company, and the expected timing of the business
combination. Forward-looking statements are neither historical
facts nor assurances of future performance. Instead, they are based
only on Aldel's and Hagerty's managements' current beliefs,
expectations and assumptions. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Actual results and
outcomes may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause actual results and outcomes to differ materially from those
indicated in the forward-looking statements include, among others,
the following: (1) the occurrence of any event, change, or other
circumstances that could give rise to the termination of the
business combination Agreement; (2) the outcome of any legal
proceedings that may be instituted against Aldel or Hagerty
following the announcement of the business combination Agreement
and the transactions contemplated therein; (3) the inability to
complete the proposed business combination, including due to
failure to obtain approval of the stockholders of Aldel and
Hagerty, certain regulatory approvals, or satisfy other conditions
to closing in the business combination Agreement; (4) the
occurrence of any event, change, or other circumstance that could
give rise to the termination of the business combination Agreement
or could otherwise cause the transaction to fail to close; (5) the
failure to meet the minimum cash requirements of the business
combination Agreement due to Aldel stockholder redemptions and the
failure to obtain replacement financing; (6) the inability to
complete the concurrent PIPE; (7) the failure to meet projected
development and production targets; (8) the impact of COVID-19
pandemic on Hagerty's business and/or the ability of the parties to
complete the proposed business combination; (9) the inability to
obtain or maintain the listing of Aldel's shares of common stock on
The New York Stock Exchange following the proposed business
combination; (10) the risk that the proposed business combination
disrupts current plans and operations as a result of the
announcement and consummation of the proposed business combination;
(11) the ability to recognize the anticipated benefits of the
proposed business combination, which may be affected by, among
other things, competition, the ability of Hagerty to grow and
manage growth profitably, and retain its key employees; (12) costs
related to the proposed business combination; (13) changes in
applicable laws or regulations; (14) the possibility that Aldel or
Hagerty may be adversely affected by other economic, business,
and/or competitive factors; (15) risks relating to the uncertainty
of the projected financial information with respect to Hagerty;
(16) risks related to the organic and inorganic growth of Hagerty's
business and the timing of expected business milestones; (17) the
amount of redemption requests made by Aldel's stockholders; and
(18) other risks and uncertainties indicated from time to time in
the final prospectus of Aldel for its initial public offering dated
April 12, 2021 filed with the SEC and
when available, a definitive proxy statement and final prospectus
relating to the proposed business combination, including those
under "Risk Factors" therein, and in Aldel's other filings with the
SEC. We caution that the foregoing list of factors is not
exclusive. We caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
We do not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in their expectations or any
change in events, conditions, or circumstances on which any such
statement is based, whether as a result of new information, future
events, or otherwise, except as may be required by applicable law.
Neither Hagerty nor Aldel gives any assurance that either Hagerty
or Aldel, or the combined company, will achieve its
expectations.
Participants in the Solicitation
Aldel and its directors and executive officers may be deemed
participants in the solicitation of proxies from Aldel's
stockholders with respect to the business combination. A list of
the names of those directors and executive officers and a
description of their interests in Aldel will be included in the
proxy statement for the proposed business combination and be
available at www.sec.gov. Additional information regarding the
interests of such participants will be contained in the proxy
statement for the proposed business combination when available.
Information about Aldel's directors and executive officers and
their ownership of Aldel common stock is set forth in Aldel's
prospectus, dated April 12, 2021, as
modified or supplemented by any Form 3 or Form 4 filed with the SEC
since the date of such filing. Other information regarding the
interests of the participants in the proxy solicitation will be
included in the proxy statement pertaining to the proposed business
combination when it becomes available. These documents can be
obtained free of charge from the sources indicated below.
Hagerty and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
stockholders of Aldel in connection with the proposed business
combination. A list of the names of such directors and executive
officers and information regarding their interests in the proposed
business combination will be included in the proxy
statement/prospectus for the proposed business combination when
available.
No Offer or Solicitation
In connection with the proposed business combination, Aldel
intends to file with the SEC a registration statement on Form S-4
containing a preliminary proxy statement and a preliminary
prospectus of Aldel, and after the registration statement is
declared effective, Aldel will mail a definitive proxy
statement/prospectus relating to the proposed business combination
to its stockholders. This press release does not contain all the
information that should be considered concerning the proposed
business combination and is not intended to form the basis of any
investment decision or any other decision in respect of the
business combination.
Aldel's stockholders and other interested persons are advised to
read, when available, the preliminary proxy statement/prospectus
and the amendments thereto and the definitive proxy
statement/prospectus and other documents filed in connection with
the proposed business combination, as these materials will contain
important information about Hagerty, Aldel and the proposed
business combination. When available, the definitive proxy
statement/prospectus and other relevant materials for the proposed
business combination will be mailed to stockholders of Aldel as of
a record date to be established for voting on the proposed business
combination. Such stockholders will also be able to obtain copies
of the preliminary proxy statement / prospectus, the definitive
proxy statement/prospectus and other documents filed with the SEC,
without charge, once available, at the SEC's website at
www.sec.gov, or by directing a request to John Belniak, Investor@Hagerty.com.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as
amended.
Contacts
Hagerty Media Contacts:
Andrew Heller, Hagerty,
aheller@hagerty.com, (231) 632-1583
Hagerty Investor Contacts:
John Belniak, Investor@Hagerty.com
Aldel Contact:
Rob Kauffman, Aldel,
info@aldelfinancial.com
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SOURCE Hagerty